Actually, I didn't think it was a hit piece. I interpreted the article the same way you did (Bezos/AMZN) use the payment data/merchant network for "products that Square is launching--Market, Cash, Feedback, Invoices, Order, Open Tickets, Capital, Dashboard, Appointments" In "THE SEARCH FOR NON-PAYMENTS REVENUE."
Once they build out the non-payment revenue, they will come back to building back the payment network to squeeze out Visa/Amex/Mastercard.
I think their initial plan was to directly build out the payment network but given the lower margins, they would have to wait a long long time. However, because of the hype/valuation trap, investors didn't have the patience. So, they have course corrected to add higher margin SAAS/software/financing products (open tickets, invoices....). Once the margins get built out, then they can get back to the payments business.
Surprising, that they are not anonymising credit card data and selling that to Hedge Funds. That could be a $25-50M EBITDA business. Majestic Research did that and sold to ITG research (for a "small" amount). But Square's data set will be more valuable than Majestic:
http://blogs.wsj.com/economics/2010/06/30/using-starbucks-du...
Here is another example of MasterCard's research products:
http://www.masterintelligence.com/