It's not that I don't see anything wrong with it, no. I quite dislike it. But I'm fairly sure they possess the full legal right to do so. What I don't follow is how this counts as censorship, per se. Amazon are not the government and they are not the sole repository of books (or e-books). While the kindle-pulling thing seems annoying, I don't quite see it as much more than that--an annoyance. I mean, the skeevy convenience store down the street from me sells those paperback "erotic" novels for $5.99, its not like Amazon is wiping them from existence or anything.
I suppose it depends on how we define censorship, but I think we can all agree that it's not required for the government to be involved to call it censorship. I mean, the American government and many others certainly
have censored things in the past. That's one reason we've go strong 1st Amendment protections against government action.
But there are plenty of other ways to censor. Denying access to publishing services is one common concrete example. Byzantine TOS and stingy licenses help businesses carry out this kind of censorship. This seems to be the exact reason that network neutrality is such a big deal: because we want to prevent service providers from affecting our access to publish and consume information, even if it just means a slower connection to google news or the hassle of going through a proxy.
Historically we've seen a lot of regulation of new businesses as they've come to dominate the economic landscape. Trains and phone companies are "common carriers" and subject to restrictions in the services they provide because of it. Is it time to recognize some newer businesses as similarly influential and similarly limit the terms of service they can offer? Google, Amazon, Visa, Mastercard, Ebay (paypal) Comcast & At&t all come to mind. Or is that going too far.
[Insightful comment about line drawing problems]
Maybe one way we can address this problem is by placing stronger restrictions on larger companies or in industries that are limited to only a few service providers. I'm not as worried about your service provider kicking you off or censoring you if you have a handful of competitors to turn to. On the other hand, if there are only a few, or if it's very difficult for you to do business with a competitor, maybe we should limit a corporation's right to terminate an agreement or censor content.