Target is in the business of leasing shelf space. If you are a third party and want prominent placement in the store, target will lease that shelf to you. If you notice where target's third party stuff is placed, its actually rarely at eye level. That premium placement is reserved for other brands to lease at top dollar. Target probably makes more money selling less of their store brand and leasing primo space than they do if they were to use that primo space to sell more of their store brand and lease the bottom shelves.

Amazon on the other hand doesn't work like a retail store. You aren't leasing a finite amount of space within the Amazon website. You are beholden to the search algorithm run by amazon which is a black box compared to an agreement made for shelf space in a retail store, you don't pay less for worse placement and you can't pay more for better placement, and Amazon continually tries to poach your business with low cost knockoffs and their search engines are uncannily tailored to prefer these results.

Isn't paying for sponsored results more or less equivalent to paying for better shelf space? The space may not "really" be limited, but for practical purposes, the second page of search results barely exists.

Not really because even then you could be trumped by an amazon basics result without realizing what happened unless you are checking for this constantly yourself. When you pay for premium shelf space you are paying for the explicit shelf in the explicit store, everything is exactly planned, nothing left to chance or uncertainty, its all very diplomatic in comparison.