Actually they don't make any money on anything (377 millions income vs 54 BILLIONS revenue). I think they're on a mission to drive price lower and lower and the Kindle is on the same route
As long as they reinvest most of the money they get and come up with new innovations, which Amazon has done so far, I find no problem with that. In fact, it's the ideal situation for consumers, and it would be great if all companies did that, instead of keeping tens of billions in their bank account, while charging more than necessary to consumers.