I agree with you about the frontline rep, that's not the person I have a problem with. I don't expect a low-level customer support rep to be able to approve such a thing. I expect Amazon to, in the event that a rep can't handle a complaint, proactively solve it in a different way, not try to fob the claimant off.
It would be just as easy to, say, bump any refund claim over 1k to someone who is paid enough to make such a decision. Amazon have decided they don't want to. And I don't really think that's acceptable. Just look at the comments in this thread of people self-censoring to avoid getting on the wrong side of the algorithm.
This is a situation Amazon has engineered, because it's cheaper to run these things through automated systems, or only frontline workers. I'm not inclined to accept what I think is pretty bare minimum as good enough on account of their size. If anything, I think their size allows them to afford and amortize better systems than a small company.
Edit: cooled it a little