Amazon and friends do have something to offer: eyeballs, and their good name. So they can negotiate.
I think you'll see newbies entering through what used to be called "vanity publishing" via Lulu etc, getting picked as a rising talent by reviewers, getting in the press, and finally being offered a contract by Amazon. This latter will become the equivalent of the old status of "published author".
Even so a system something like this would be a win-win situation for authors, distributors and readers (and more arguably for the environment in terms of reduced need to chop down trees and transport books around). The distributor could also supply additional services at a cost, such as the ability for readers to have their private libraries in "the cloud" as a dropbox type of system. So I think the distributor would have sufficient scope to add value around the product that an author may not have much incentive to leave prematurely.
It could be that I have no psychological anchors like your grandfather gift, your lovers notes and so on some people have. Some people love sniffing the glue and the ink chemicals too.
Quite the contrary, I love books content, not continent.
I hate having to "break" a book for reading it because otherwise you won't have uniform lighting on the page, in fact you never have in a book.
I hate having to sustain the weight of a big novel.
I hate having to wash my hands because it gets dirty with the poisonous ink.
I hate having to carry around tons of books when I move.
I hate not being able to change the font size or the format in shorter lines so I could speed read it better.
So I started digitalizing my library long ago, and I'm not going back, I'm not the only one.
I met a man 10 years ago that had 1000 digitalized books library, I remember being socked when he showed me. Now more and more people are doing that and is quite normal to see.
I'm cheaper than an existing publisher if the author is willing to go digital only. Hmmm, maybe there's an opportunity for small publishers to make a comeback...
Funnily enough, I was talking to an author in the pub tonight. He was saying that he likes having a publisher because he doesn't have to do the editing, advertising, publicity, etc.
If we end with no other ways of handling the book to the reader, Amazon might get too close to a monopoly in the book market.