First, it depletes the pot awaiting actual no-shit real hard-working authors who supply a product people want.
Secondly, Amazon react by trying to engineer algorithmic anti-scam measures, which end up catching the aforementioned hard-working authors instead of the scammers. For example:
http://www.walterjonwilliams.net/2016/03/amazon-may-they-cho...
(TLDR: Walter Jon Williams is a respected author, who has been bringing out his backlist of out-of-print novels as ebooks. Amazon's anti-scam measure yanked all his books off sale -- right after he'd released them and run a marketing campaign -- for the crime of having a table of contents at the end of the books. Because that was easier to automate than, say, collecting actual pages-viewed metrics as a basis for payment instead of just checking the last-page-bookmarked.)