There is a LOT of money in the government defense sector. AWS is in an excellent position to capture a lot of that money, but their primary competitor in this space, Microsoft, has been preventing a complete domination and monopoly by Amazon.
With Alexander on the board, this will ultimately lead to different/better insights for how Amazon positions itself in this government sector. Alexander can bring a ton of value, just with his contacts and networking alone, let alone the insight into how security and data operations work in the intelligence community.
Ultimately, this isn't a step towards more government surveillance. The government can't coerce Amazon any more with Alexander on the board or not; the rules are still the same. This is fundamentally about Amazon's desire to get in on the lucrative big dollar contracts that would otherwise end up going to traditional defense contractors like Lockheed, Boeing, Northrop.