It would have been better for everyone--Amazon, authors, readers--if they'd never allowed sponsored books at all, or at least kept them below and perhaps smaller than the real also-boughts.
Some may see this as heresy for even suggesting it, but frankly, if Amazon wanted to make more money off KDP, they'd do better by (say) lowering the royalty rate to 65%, or charging a "per-month, per-book" fee to be on KDP--if that would keep the neutral recommendation engine in place over the pay-to-be-seen. The heavier the influence of ads, the more of a Wild West it becomes and the less the customer benefits, IMO.
"Money changes everything." --Cyndi Lauper/Tom Gray
I don't see it as heresy.
The problem is that we don't know how much Amazon makes from book sales vs. how much it makes from ads. More precisely, we don't know how much it makes from KDP books vs. how much it makes from ads. (I see some trad ads on book pages, but not that many compared to all the KDP AMS ads I see.) If Amazon is making an enormously greater amount on ads than on book sales, then making ads prominent is a reasonable business strategy.
Of course, the best strategy would be to find a balance that maximizes income from both. That would seem to mean, at minimum, that ads shouldn't interfere with Also Boughts, which should retain a prominent position. Right now, Amazon seems to be heading back to Also Boughts above all the sponsored product stuff.
I've expressed skepticism before about how much Amazon can possibly make from CPC ads in two huge carousels. I checked the page for my first book, and the carousel right below the Also Boughts has 14 pages. At 13 books a page, that's about 182 (the last page isn't full). The bottom carousel has 62 pages.
That means another 806 ads, for a total of 988 ads on one page. Do people actually page through all those ads? My guess has always been that what clicks there were occurred on the first page of the first carousel. Yet I must be wrong, since Amazon continues to put out that many ads.
Despite all I read about ad blindness, which would suggest that floods of advertising gradually lose their effectiveness, Amazon is certainly not the only company to do this. For a long time, every search result on Google has sponsored ads at the top and sometimes other places as well. That's just one example, of course. Even relatively small blogs sometimes have both left and right sidebars filled with ads, leaving the actual content in a narrow ribbon between them. The blogs that are more restrained seem to have sponsored ads every two paragraphs or so. That trend doesn't seem to be diminishing, either.
Maybe when ad blindness really kicks in in a big way, those trends will change. Until then, I understand Amazon's desire to monetize the page space, even though it still annoys me.