Amazon has generally followed the tradition of booksellers and libraries in the free world, erring on the side of inclusion, with regard to controversial topics. Given that most of the 'excluded' books were hardly controversial at all -- even anti-gay activists rarely expect major retail chains to drop gay-themed works -- a 'glitch' or hack/prank was always more likely than an intentional Amazon decision.
http://bryant.livejournal.com/672165.html
While the method is plausible, the rebuttal is plausible as well. Who to believe?
Let's face it, Amazon's system probably doesn't require large numbers of users flagging something before it takes automated action, because the average book just isn't going to get that much attention. So combine a likely low barrier to removal with a CSRF hole that lets you trick people into flagging whatever you want them to, and... you get exactly the result people are raging about all over the internets.