Amazon probably complained to Google and Google despite already having the rules on the books decided to enforce it on this one site, while also keeping many other low traffic clone sites offering the same service alone. Call me paranoid, or cynical but I've seen much worse from Google on the AdWords side of their offerings.
If that were the case Amazon would have a much simpler solution by stopping the affiliate account altogether, instead of having to ask Google to stop some of the traffic.
This has been an amazing thread but there really is a pattern that is hard to follow for webmasters. In the case of the original site couldn't Google have just de-indexed the "extra" pages but left the the index page alone since it is indeed useful?
Also, how did his site get canned but others like sportslinkup.com, which is an ebay affiliate spam site cloaked as a link directory, have over 7 million indexed pages and 8 million indexed images (all hosted by ebay, not the sports site) and it gets over half a million Google visitors per month (according to compete.com)?!? I think the sports site is even scraping Google for keywords, it's full of examples of what not to do, but it's been sailing along for years with Google approval, or at least no automated detection.
The fine line between sites getting canned and sites getting MASSIVE traffic for essentially the same thing is very confusing.
