"We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles," Amazon said. "We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books".Which is highly interesting: as Bruce Schneier puts it, "in a supply chain, profit — and power — tends to flow to the most constrained member of that chain." In an airport food court, most of Starbucks' or MacDonald's profits flow towards the airport, for real estate in that situation is constrained; in ebook publishing on the Kindle platform, profits flow towards the platform owner (i.e. Amazon).
I'd rate this as a temporary setback for Amazon; in the war to define the internet book distribution chain, Macmillan have merely clawed back some of the territory they've lost over the past five years and bought themselves some time in which to try and get their ebook sales up and running on a profitable basis. In the long run, though, if they don't make it work within a couple of years, expect to see more battles (and possibly a new CEO: there are many firing crimes in publishing, but pissing off a major distribution channel in order to win a concession and failing to exploit it successfully has got to be one of them).
Longer term the publishers badly need to reconsider the entire idea of selling ebooks wholesale or on an agency basis via internediaries. This goes against everything they've ever done before — but the correct model for selling ebooks (profitably and at a fair price) is to establish a direct-to-public retail channel, like Baen's Webscription subsidiary. Oh, and once you're there, you can ditch the annoying DRM.