The publishers were getting paid by Amazon. But even taking your statement at face value, who needs publishing houses anymore? This isn't 1950. If Amazon wants to put the publishing industry out of business, I'm OK with that. There's no rule that says publishing houses need to exist.
You cannot maintain an industry selling the majority of your goods below cost!
Let's leave that to the market to decide. Amazon thinks that it can.
Then WHY IN HELL ARE YOU IN FAVOR OF THE GOVERNMENT GETTING INVOLVED??? The market WAS deciding! Willing sellers: the publishers setting their willing selling price to willing buyers... the public, selling through willing agents, both Apple AND Amazon. Why is the government getting involved??? Because AMAZON, wanted to keep the lion's share to itself and dictate the prices itself, that's why! Use your brain: this is centralized control... anathema to conservatives!