Once apon a time, in ancient Persia, people would go the the nearest market to buy and sell their goods. For each good it's specific market, enclosed by a wall. By decree, customers would enter the market for free, but sellers would have to pay for entry in that closed place. The clay tablet market was small in area but ancient and renowned and had high and strong walls. A few gatekeepers were able to restrict access to it. Customers knew they had to pay high prices for the goods, since sellers had to pay the Gatekeepers for the place in the market who in turn had to pay dearly for the masons who strained to keep the high walls from falling, the painters who kept it clean, and the guards who filtered access to seller's goods. Since the price for passing the gates were high, only a limited number of merchants were able to open their stall, limiting further the place needed inside of the walls.
Now that law regarding an enclosed market was appliable only inside of cities, because there space was scarce, and a market disturbed the neighbourhood, hence the walls. Previous attempts to sell clay tablets outside of the city had failed, due to both sellers and customers not wanting to travel far with the heavy fragile goods, thus -despite the high prices- customers kept on buying clay tablets at the market.
One day, an adventurer came back from his journey in the far Egypt with a new way to transmit written words : Papyrus and Scrolls. He created a market in one big zone just outside of the city, where he introduced his Scrolls. A few peope where interested and bought Papyrus and Scrolls, however the market didn't really take, as most people prefereded the touch, smell and feel of the clay tablets.
Then a daring (and mighty) merchant named "Amar Zone" started to direct its many clay market customers to his new Papyrus and Scroll stand. He even created a transports service led by his friend "Kahin Deul" which would take customers from the old market to the papyrus one, and that even would deliver papyrus at their home. At the papyrus market, he would buy the products from producers for a fair price (leaving them time to return to their papyrus productions) and resell them at a lesser price than a comparable clay tablet... This led a few independant clay tablet producers to switch to the simpler work of creating papyrus.
Following that daring merchant, others -such as "Bar Zand Hoble", "Samah Shword" and "App Heul"- started to propose comparable service, even furthering the affluence to the papyrus market which began to be renown in turn, despite the other clay tablet merchants and gatekeepers numerous attempts against it.
They even went to the fair Calife, asking him to augment papyrus taxes, to limit its commerce to Gatekeepers or to, outright outlaw it, but that's an other story.
A few months later, Amar Zone died, leaving the direction to his son, "Amar Son". As soon as he inherited, Amar Son decided to depart from his father's strategy, took councel with App Heul -who had demonstrated he knew a few dirty tricks- and decided to disminish payments to the papyrus producers. He counted on his big stall, Kahin Deul, and great renown to be able to augment its wealth.
At first the Papyrus producers were unhappy but kept on selling their goods through Amar Son, thinking that customers came to the papyrus market for his stand. However a few decided to create their stand : without the walls that surounded the market, anyone could open it's own stand. Some simple stands could be created in a matter of days. While some producers started their stand on their own, others would create a new one in common, paying someone for tending it while they would work.
In truth, what customers really were interested in was NOT Amar Son or Kind Heul, but Papyrus, and with no GateKeeper to pay, the new stands allowed them to feed well the producers and their family.
As they no longer provided Amar Son with their papyrus, his stand in the market started to pale compared with the myriad of new ones, and one day he cursed deaply his father for letting the Genie outside of the bottle.
While the story might end here, we all know that a good tale ends with an happyly ever after...
The Calife's daughter who happened to pass by, hearing the powerfull curse, turned her head and saw Amar Son. She fell deeply in love with him and he with her. After their marriage, she convinced him to return to his father's way and pay correctly the papyrus producers, and while his stand never recovered fully, Amar Son found out that living a happy life with his wife was way more pleasant than managing his stand.. They had a great many children, who read and produced papyrus, and lived happyly ever after.
As you've understood, Clay tablets beeing replaced by Papyrus is a (bad) analogy of physical books being replaced by ebooks. Part 2 's starting base is entirely fictive, but represents a fear that I see reflected in a great number of (potential) self-publishers's posts.
In it, I make short work of the difficulty for producers to create their own stands, but in fact it REALLY is easy for a new author to create his own selling website, the difficulty then beeing to get known. This difficulty exists, with or without Amazon. If Amazon were to change its conditions, the other webstores would enhance their market share by receiving greater attentions from authors, and if they in turn started to follow Amazon's way, new webstore would appear, following the previous path.
Just yesterday, I had a look at options for creating a commercial website, and found out a few open-source (free) packages, that can "take care" of an author's ebooks selling. They even can be used to take care of an small number of author. My take is if Amazon tried to play dirty, authors would turn to other resellers, and it's Amazon who would stand helpless in the end.
What can be done to entice Amazon to not change it's term ? Propose the ebooks to other resellers, making sure that it knows that it's NOT alone in the game.