Because Amazon is using AWS to literally carry every division they have. I don't think retail has ever been profitable for them, happy to be proven wrong; but some of their newer ventures in hardware: Alexa, Kindle, Fire TV, Ring, and Echo have all been losers. If each were normal companies they would all likely be going out of business, bankrupted, or chopped up for parts for PE.
It's no different than Google using ads to subsidize failing ventures in order to gain market share.
I think "literally carry every division they have" is incorrect; on a margins basis, Ads are significantly more performant than AWS, although AWS wins on volume of profits and still has great margins.
Beyond that, I don't think this kind of analysis is meaningful because it fails to account for second order effects. For example, even if retail is breakeven on a net basis, it still subsidizes a gigantic fleet of machines used to power retail from which AWS came from. Negotiating in bulk to build data centers with a significantly larger internal customers leads to better unit economics for the AWS side of the build out even if retail is break even on a first order basis or even has losses. The same argument can be made for ads as well. Amazon is great at monetizing infrastructure /because/ they can sell not just significant volumes of the end product, but and the infrastructure used to deliver it.
I think you could make the same argument for Google, which is that technically, they should be able to use the second order effects of assets they've needed to put together to run search and ads to sell better infrastructure. Theoretically, this should mean that GCP is king, but it doesn't. I'm not sure there's an obvious answer to this question, or even a great clue behind first mover advantage AWS had in cloud.
It is certainly my gut feeling that Amazon is evil as hell but I think that I'd really like to see an actual investigation by folks who study this stuff to know whether Amazon was using their pricing predatorily or not. People, especially executives, are dumb - there's bound to be an email somewhere about John congratulating Fred about managing to shut down Plug's Stuff Hut a small family business if that was the intent and these actions were being made to accomplish this goal.
However, I thing that your last point is not relevant. What-about-ism has no place in the law or it necessarily creates a slippery slope. If Google is also able to do this and purposefully did it in a predatory manner to accomplish a market advantage they both need to be legally pursued - and GCP not succeeding doesn't necessarily mean that Google didn't try underhanded actions to get it to succeed - it either means those actions weren't enough or they were incompetent (but still malicious). Either way each case needs to be judged on its own.
