Making money with a search engine is a solved problem. Making a search engine worth switching to is not-- that's what they are (and should be) focused on. I'd wager their investors are telling them the same thing.
I'm guessing it's not against the T&C's, otherwise Amazon would have closed his affiliate account by now. They're quite good at that.
Google probably doesn't see the point. I'm sure there's something in the T&C's that would allow Amazon to close an affiliate account for any reason they want to. If they still get the same amount of traffic from Google either way, they'd close it.