Whether Amazon had the right to do this is an argument for another day. There is no question that they badly mishandled it. At the very least, Amazon should have told their buyers that it had turned out they hadn't the rights to sell e-copies of those books and that they were going to need to remove them. That appears to be what Amazon will do in the future, or that Amazon will let people who bought copies in good faith keep them while not selling any more copies in the future.
Fine, but none of that touches on the real problems. Amazon is telling you that you will never own any book you buy for your Kindle. This is the old DRM (digital rights management) trap that won't let you make back-ups of your DVDs snaring yet another media's users.
But, it's worse than that. Now, that we've discovered that Amazon can remotely and automatically delete your books without your knowledge or consent, what's to stop Amazon, some other company, or the government from not merely deleting it, but replacing it with an edited version? Nothing.
It was a scene that could have come right out of 1984, since the protagonist's job, is to change newspapers and records so that the official word on what has happened before reflects what Big Brother wants you to believe today.
As Orwell himself wrote, "Who controls the past controls the future. Who controls the present controls the past."
If we rely on companies like Amazon that claims the right to control our books, we're opening the door to letting a future Big Brother control not just what we read, but eventually, what we think.
I had liked the idea of Kindle and thought about buying one. I already have e-book applications on my computers and on my iPod Touch, including Kindle on the Touch. Forget about that now. Without the freedom to truly control and own any intellectual property that we're either given or buy, the Kindle and other devices like it are just attractive traps.