I didn't when I got a cheap device that was faulty and fell apart more than once. I have since decided it is a false economy. 159 quid plastic tablet vs 259 quid aluminium one is what it comes down to for me. The extra 100 quid gives me as the consumer a much more pleasurable device that's much more durable and lasts longer. It pays for itself because I can actually use it before it breaks. That's just my experience so far.
Google and Amazon don't make money from hardware/software. And if Android OEM's refuse to lower prices then Google can still continue with Motorola. Android OEM's who are just in the game for hardware are in danger.
Amazon sells content at relatively high margin. Google has a new content store they want to push. The profit from selling the hardware is only part of a consumer's financial relationship with these companies. I'd be far more worried for Samsung/Asus, which are entirely hardware based.