explains why they want to do it, and reads in part:
Alternatively, you can use a different POD service provider for all your units. In that case, we ask that you pre-produce a small number of copies of each title (typically five copies), and send those to us in advance (Amazon Advantage Program-successfully used by thousands of big and small publishers). We will inventory those copies. That small cache of inventory allows us to provide the same rapid fulfillment capability to our customers that we would have if we were printing the titles ourselves on POD printing machines located inside our fulfillment centers. Unlike POD, this alternative is not completely "inventoryless." However, as a practical matter, five copies is a small enough quantity that it is economically close to an inventoryless model.
So not quite as bad as some people have been saying, hopefully. I should add that I haven't checked that Amazon.co.uk and their other regional companies will be following the same policy.
In other news eBay UK and Ireland are banning all sales of downloadable etexts and software etc. due to widespread abuse. Doesn't affect me, and hopefully not many others in the games industry.