Not always. I mean, isn't this the reasoning behind the first dot-com bubble? At some point you have to turn a (operational) profit, and the more money you invest, the more profit you have to turn in order to recoup your investment.

First the publishers ignored e-books, then laughed at them and hated them. Now they're fighting, and some time in the next two years, Bezos will likely win. When you look at the Kindle strategy, you're looking at a business unit mobilised for war. An army doesn't return a profit until after the land is conquered.

Wars are very risky things. The publishing industry (like the RIAA) isn't very large financially, but is disproportionately powerful politically. It's very possible that the publishing industry will lay legal obstacles that would make Amazon's "conquest" a very expensive affair. Let's remember that wars, historically, have not been profitable enterprises.