The issue is that short sighted people only focus on the here and now. They pay a touch more than their competitors and burn through employees like a gasoline fire through a paper house, sure, but the longer they can sustain this system the more competitors will stumble and fail along the way until they are the only option.
It worked for Walmart, and now Walmart is a trash company with trash products that treats their employees like trash while paying them such a low amount that many of them are on food stamps and government support and then keeping their schedules so screwed up that they can't better themselves out of the horrible situation without herculean efforts.
Amazon is following this pattern and will continue following it until market forces make them stop. And those forces do not exist and probably will not ever exist as long as there is money available for the desperate.