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?
“Terms of Service”
I'm not a lawyer but I suspect the answer might well be yes.
Technically I suppose it's in the same category as stolen merchandise. A thief can't legally sell it, and even somebody that pays money for it doesn't technically "own" it. It still belongs to the rightful owner.
Now, if they were physical books it's just wildly impractical to go out and recover every copy, and I don't suppose any such thing would ever happen. They could "ask" for them back but that's about all. But in this case, it's just an entry in a database that goes "poof". They do it because they can.
I don't have any real heartburn over this. They made a mistake and they're owning up and fixing it. Not a big deal to me.