But since the cost of producing and delivering an extra copy of your book is essentially zero, we have created a legal system with the same economics as a pyramid scheme. Right? So is it legal?
pyramid schemes — also referred to as franchise fraud or chain referral schemes — are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product. The real profit is earned, not by the sale of the product, but by the sale of new distributorships. Emphasis on selling franchises rather than the product eventually leads to a point where the supply of potential investors is exhausted and the pyramid collapses.
http://en.wikipedia.org/wiki/Franchise_fraud
Seems like, under that definition, the question is whether people are paying you for the book, as opposed to paying you for the right to engage in the pyramid scheme.
Remember, copyright law gives you a right to exclude, but it does not absolve you of other legal obligations. For example, you can commit antitrust-like violations using a copyright (this is called "copyright misuse"). So if your scheme is indeed a pyramid scheme that violates the law, then copyright will not protect you.
That said, I'm just hypothesizing on facts I'm imagining, so obviously consult a lawyer with any real situations.
"pyramid schemes — also referred to as franchise fraud or chain referral schemes — are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product. The real profit is earned, not by the sale of the product, but by the sale of new distributorships. Emphasis on selling franchises rather than the product eventually leads to a point where the supply of potential investors is exhausted and the pyramid collapses."
in this case there is a real product, even though each extra copy costs $0
secondly, we can't really prove one way or the other -- after all the ebook might be useful for some people, who is to say the "real" profit is earned by selling the option to be an affiliate and not the product, since you get both at the same time
and thirdly, ANY copyrighted work needs to be bought only once if the user keeps the copy in good condition, so the supply of potential buyers will be exhausted and sales of the book will diminish as the market is saturated