This Businessweek story does a very good job of explaining what's been happening behind the scenes in the relationship between Amazon.com and the publishing industry:

For years the marriage between Amazon.com and the big New York-based publishers was mostly a happy one. Amazon was expanding the overall market for books and giving publishers a new way to connect with readers...Back then, Bezos was cultivating friendly relations with publishers and trying to make his e-commerce company profitable. In 1999, when Businessweek asked him whether he would ever move from the business of selling books into the business of making them, Bezos demurred: “We’re really, really good at exactly one thing, which is helping customers discover things that they might want to buy online. And that’s enough.”

The rifts opened eight years later, during Amazon’s development of the Kindle e-reader. Representatives of Amazon streamed through the offices of New York publishers, urging them to accelerate the pace of digitizing their catalogs ahead of the device’s big launch. The book houses cooperated and even obediently kept the successive Kindle prototypes that Amazon showed them a secret from the outside world. Then Bezos got on stage at the W New York hotel in Union Square in November 2007, and as part of the unveiling of the Kindle, proclaimed that he would sell New York Times bestsellers for $9.99.

Publishers were shocked...

You really should read the whole thing.