While you both have a point, I'm not sure it makes a difference in practice.
OK, granted, I've been an Amazon.com customer since 1997 or so, but to me a 3.5 star rating is like writing BEWARE! in flaming letters across the sky. I never buy something that poorly rated before thoroughly investigating what's behind it. E.g. Kindle version's content is messed up I discount since I don't play in that ecosystem except for freebies.
While there are plenty of mostly bi-modal distributions (5 or 1 stars), for lots of things there are carefully chosen ratings in-between, often telling you why it lost a star or 2. Even ones edited some time after with additional commentary and often an adjusted score.
So I'd say it gets the specific job done, which is quite different than YouTube's where the cost of a wrong choice is very very small. I find the reviews invaluable, to the point where there's a lot of stuff I won't buy unless it has enough quality reviews for me to make an informed judgement.