Apparently it's a rights issue, Amazon didn't have the rights to that edition of the book. Technically they were in the right to delete all copies, it's just that it smells bad, plus they deleted the notes of at least one person who was doing a school project, which was doubleplusungood. By refunding the customers money it isn't theft, just lousy business practice.
I understand the rights issue, but does that negate our rights? If they had published a paperback accidentally, could they come take it out of my house without permission? Even if they left $.99 on the counter?