Apparently the Colorado legislature tried to force Amazon to start charging sales tax to Colorado residents since it had affiliates that operated out of Colorado.
The Colorado law is bad and so is Amazon's handling of the situation (closing accounts on the same day they sent out the email notice).
Amazon warned California affiliates that if such a law passed in California, it would be forced to sever its relationship with them; I find it hard to believe that it did not similarly warn Colorado residents prior to the passage of this legislation.