Well-why use the service if the company can snoop through it at will? Seems to defeat the purpose of having a private data store. All you need to do to see someone's data is work for customer support at amazon.
Because the service is cheap, comes with a ton of storage and is convenient. Few average people care about their privacy online.
Well, you have a license to use the material, but that license probably wasn't written with the intent of you streaming it from someone else's server.
Hmm... there are laws allowing you to make backups of licensed content. Can you explain more about how license would forbid you from storing those backups on Amazon server?
perhaps streaming would in the law as a form of broadcast, thus storing it would be fine but as the purpose of storing in that situation is to broadcast that would be illegal (not saying that is the case, just making a reasonable scenario)