IIRC Amazon last quarter made a profit of some $ 200mio. Apple made over 7 BILLION. If this continues, Apple will make more profit in 10 days than Amazon in a YEAR.
So Amazon can only succeed (a little) as long as Apple does not feel threatened.
Because Amazon can subsidize an Amazon-tablet. But they cannot subsidize dozens millions of tablets to fight a tablet war against apple. The money simply is not there.