It’s not crazy if you think about the long game. When there’s no one else left to sell anything, Amazon will have a monopoly on retail. The supermarkets have been playing a similar game. Margins are only about 2%.
The danger for Amazon is the same one the supermarkets face. As food is a sure thing, there will always be competition. So Amazon is the ultimate spoiler. No one will ever make real money in retail again until Amazon implodes or changes.