You're making the argument for why this choice is not "free" for AWS. Not only do they lose a paying customer, but they cause some of their customers to debate the risks of doing business with AWS. It's precisely this balance of capital (including goodwill) that gives private companies the freedom to choose with whom they do business. Customers are the lifeblood of a business, but every one of them is also a potential liability. Every severance of a relationship with a customer carries more cost than merely the lost revenue.
So no, AWS _alone_ is not the arbiter of what actions are supposedly harmful to the fabric of democratic society -- the market for serving infrastructure is vibrant and competitive. If nobody in the market will do business with a given customer, well, that's capitalism for you.
(and just in case it wasn't clear, I applaud AWS making this choice, and hope the market at large will do the same)