Amazon has exercised substantial market power to get publishers to do what they want. If they really wanted to, they could have pushed back just like they have in other areas.
No.
For one thing, DRM also works in Amazon's favour (reselling multiple copies)
For another, DRM is a pretty big sticking point for copyright holders, music, text, whatever. It's the one big thing that publishers all think that their business model depends on
Arguably not so much with music anymore given the prolific nature of lossless DRM free downloads available for purchase.
Personally, I buy more music now than any other time in my life: high quality sources playable on all my devices.
Most music is sold without digital restrictions, and many video games are also sold without digital restrictions.
One of the big publishers put heavy pressure on Amazon to patch this exploit or else they would pull all their content from the platform (or so I was told).
(I worked at Kindle 2017-2019, and was on the team that wrote the code that OP reversed engineered)