I couldn't think of something worse than demanding Amazon decide what is counterfeit or violates regulations and policing that rule. The law on both those points is far too complex for the result to be anything but Amazon blocks what the big brands tell them to and protect them from competition.
Amazon is essentially a logistics company with a search engine. It doesn't really make sense to have them enforce regulations or counterfeiting rules than it would to make UPS and google. It's not like they hide who the seller is on any item (it's listed as sold by).
What your complaining about is a fundamental consequence of anything that lowers the barriers to selling goods. You once needed to buy a storefront to sell retail goods, later you at least needed sufficient name recognition for people to visit your website -- that investment gave anyone whose goods were counterfeit as well as regulators assets to seize.
But just like making it easy for every citizen to publish their thoughts means we see lots of hate and dumb shit online -- anything that lowers the barriers to selling retail goods (in general a good thing) will make it easy to sell counterfeit or defective crap.
In the long run, I suspect tech will make reputable 3rd party evaluations easier to access but let's not blame Amazon for not becoming an arm of the state and judging what is and isn't legal.