Maybe there enough people out there who don't notice a $700 overage to offset that, but it seems like there would at least be a visible decrease in support costs if they had a better system.
Not everyone has a high spend account and a rep who brags about their policy of refunding mistakes frequently enough to snipe them with "If you have a policy of refunding mistakes, then why didn't you?" in front of customers.
I would like to emphasize that I've chosen my words carefully: I don't know for certain that the rep intervened, but I made trouble, emailed him the information necessary to resolve my issue, and then my half refund became a full refund. Any connection between these dots is pure speculation on my part.
The first 2 points in GP's post were Amazon's bugs. It's not a user mistake if the user fails to fix the vendor's bugs.
These aren't controversial, even though they reduce revenue, because they improve the customer experience.