That just sounds even more curious to me. How can a company make an app that doesn't read a format it invented? AZW3 has been around for years. There's got to be enough time for them to implement it.
I honestly think that Amazon can't fathom a world where you could end up with an AZW3 file that wasn't purchased, and therefore directly downloadable from, their store.
I heard that it's because Amazon don't want to use WebKit for HTML rendering. AZW3 is mostly EPUB in different package.
Don't quote me on this though.
Why would Amazon have to use WebKit for HTML rendering? Does Apple have rules about that which apply to more than just web browsers? (IIRC there's also some restriction against JIT, but that would only matter for JS-heavy stuff, which the web is but ebooks definitely aren't.)