I love amazon and think they're probably a good investment, but it is really funny to see the different reactions to this vs. Apple.
And volume actually hurts you if your margins are in the red. ;)
Suppose you buy $1000 TV on AMZN, we used to save ~ $85 on tax alone. This was main reason AMZN was doing better in the past. Now, why would someone buy a TV on AMZN, rather buy it locally on a store.
This reduced their volume. AMZN has become a low-margin low-volume business.
I think taxing sales is the wrong thing to do - you must tax the entity recieving the money. So if amazon decides that the US is too high a tax rate, they can move their HQ to the caymen islands, and pay effectively no sales tax. This should lead to optimal tax rates across the board hopefully, whilest lowering prices.
For buying expensive things amazon was a great place, because the buyer was not paying the sales tax. Now, they have to pay the sales tax, so there is no advantage of buying from amazon.
On the flip side, having low margins usually means it's more difficult for other people to come and eat your lunch. Apple's incredible success has little entrenchment (well, it did for a short period earlier in the cycle when every premiere app was iOS only), and investors have to consider the possibility that a single uncompelling product release can devastate the company. Amazon has no such threats.