Two points and I'll go backwards.
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I'm wondering what the people who were upset thought Amazon should do.
From what I read some of them felt they should have been allowed to keep the books, and some felt Amazon was fair. Of those who felt Amazon was fair, most of them simply wanted an explanation before they discovered the deleted books. Apparently no email was sent to Kindle owners. If it had been me, I would have liked an explanation being posted or emailed. I think Amazon now realizes that they should have done this. And I have no beef with Amazon removing what was illegally sold. I hope they are more diligent in what they allow to be sold through their Kindle store in the future.
My only other thought on the illegal aspect is that if I'd purchased a printed copy, I'd still have it; and that brings us to the second point: Digital downloads.
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You ask "Why buy digital?" The answer is, "you can't." The EULA makes it clear that it is impossible to buy an eBook for the Kindle. All transactions are rentals, not purchases; Amazon retains all property rights in all eBooks and your money only gets you a license to read the book, which can be revoked without notice at any time.
Here's a few snippets from their selling page for the Kindle (and the bolding is mine for emphasis):
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Now you can always have your entire library with you.
A copy of every book you purchased from the Kindle Store
Purchased isn't the same as leased, not as far as I understand the terms. Then I went back to their EULA and found this (again the bolding is mine for emphasis):
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3. Digital Content
The Kindle Store.
~Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.
So I'm guessing that "keep a permanent copy" is voided by "will be deemed licensed to you"?
All in all, I now look at the Kindle differently, and don't think I'll be spending money for one. I'd rather own fewer books, use the library for others and do without for the rest. At least I get up every morning and my printed books are still here.
But it's always an interesting discussion, and now I need to go double check the EULA for all my digital music from Amazon.
BTW, when you get back here (if you do) ... have you melted in the heat and WELCOME to sunny, warm Oregon. Although we are wearing jackets on the coast.