Whether or not they were depends on what the "primary purpose" of the app was, which is very difficult to objectively determine (since there is no reason that the primary purpose has to be the most prominent function.)

Google changed the terms of the agreement in a way which made them much less ambiguous, which made the Amazon app clearly in violation rather than merely arguably in violation.

It's shitty on both parts. For one thing it highlights how we're at the mercy of Google's whims. Their terms aren't a bi-lateral contract. Apple's App Store tantrums regularly make the news, but it's clear Google has exactly the same power.

For another thing, it was a pretty stupid thing to try to do for Amazon, and can be interpreted to show how desperate they are.