Whom is Amazon going to sell low-bin Gravitons to? It isn't cost effective to run them, just like it's not cost effective to use low-binned Intel or AMD chips in datacenters. It's intrinsic to the way all chips are manufactured.
Making your own low performance chips makes clear economic sense, as the producer and consumer of all output. But there have been decades of people trying to make their own high-performance chips as both consumer and producer, and they inevitably fail. And it's not super black and white, whose "subsidizing" whom, in the chip business - datacenter purchasers get cheaper chips because Intel can sell lower-binned parts to enthusiasts, while enthusiasts get cheaper parts because datacenters pay more. Same thing is observed for GPUs, product segmentation in chips is a real synergy and not zero sum.
Who knows if that will succeed, for the idiosyncratic reason of the foundry business being separate from the IP business. Did it really just take a corporate reorg? Maybe AMD was right.