It's certainly a strategy, just not one that appeals to me, or (I imagine) to most of the readership of this site. Essentially Bezos is saying "your desire to make money is a weakness, and we're going to beat you by being cheaper than you." If you can wring out all profits, then no other players in the industry can afford to invest, which validates the strategy. Even employees become not an asset, but an obstacle to greater cheapness. Per Steve Yegge, Bezos reportedly said on multiple occasions that people should be paying him to work at Amazon. There's your endgame!
Here's another brutal, but far more appealing strategy: "Your lack of vision, imagination, and agility is my opportunity." Execute it properly, and you revolutionize the industry instead of commoditizing it.
That statement is micro-econ 101 though. In a perfectly competitive market, no firm can have economic rents. A high margin implies a non-competitive firm or industry.
Here's another brutal, but far more appealing strategy: "Your lack of vision, imagination, and agility is my opportunity." Execute it properly, and you revolutionize the industry instead of commoditizing it.