"this is very anti-entrepreneurial."

This is the end result of the "pro-business" crowd pushing society's tax burden into regressive taxes like sales. Sooner or later those taxes have to go where the money is.

"all the small business, affiliates (large and small) will now relocate to other states that are more friendly to their business."

No, all of them won't. Many have physical locations in their state which they earn more from then they do from Amazon.

"Too bad California :("

Maybe you missed it but it's also too bad for Amazon. Affiliates add value, 40% of their sales. Now some will relocate and some will fold but the majority will keep selling their stuff and trying to chip customers away from Amazon.