Of course, a company can have any policy they want, and people who can't live with those policies have no choice but to seek employment elsewhere.
From a cold business perspective, the real question Amazon and such have to answer is if the loss of those employees is something that they are OK with. It sounds like Amazon's answer to that question is "absolutely yes".
Companies or their managers sometimes get a reality check after some confident answer like this. Not as often as we employees would like, but still. Remember those people who tought there was a worldwide market for about 5 computers? Or those who invested with SBF, because playing computer games during high level meetings is proof of... something?
The issue is Amazon is a huge company, so even if you're working in an office you're still practically "remote" from most other workers. So when you need to work together, you have to do it the remote way, ala zoom.