I don't think Amazon is looking to compete with Dropbox but really iTunes in the cloud. For them, competing with Dropbox would be like shooting themselves in the foot. As long as Dropbox remains on S3, Amazon makes more money the more successful Dropbox gets. If they start to compete directly Dropbox will surely move to a cheaper solution and Amazon will loose a pretty large contract. They would also loose some trust with developers who feel Amazon might smash them at any moment. If Dropbox ever moved as they probably will, I think Amazon may consider competing, but even then don't seem to be in the business of creating client software (exception kindle).