In the end, I think this will hurt Amazon and the Kindle more than anyone. I realize there are points to be made on each side, but Amazon's action turns me off. (Aside to free marketers and libertarians: yes, we do understand the Amazon has the right and the freedom to stop carrying any products they choose, just as we each have the right to use BN.com, Powell's, brick & mortar, etc, as well as the right to bitch and moan when our favorite companies stop sell stuff we want to buy from them. There is no debate on this point. I hope that clears it up for those of you who pose yourselves, rhetorically anyway, as being "confused" on this issue.)
As Scalzi wrote, "If nothing else, this bit of asshattery on the part of Amazon has well and truly cured me of any desire to ever get a Kindle."
I did consider a Kindle. The only reason I haven't bought an ereader the this point is that I've been waiting for the field to settle down (don't feel the need to pay premium rates to an early adopter) and I have about a hundred unread books at home now.
Regardless of the details of the debate, I hope other publishers push back on Amazon, and give Amazon the choice to strip their site of all major book publishers. Sure they can squeezed them one at a time, but how long can they afford to punish everybody. I doubt Amazon intends the punishment of Macmillan to last long, Amazon is losing revenue here too.