There is stupidity on both sides of this issue.
First, the state of California. All Amazon affiliates in the state PAY INCOME TAXES. California just wiped out millions of dollars in income taxes overnight by passing this law. Now they will get zero dollars in income tax and zero dollars in sales tax. Plus they put a bunch of people who make a living off the program out of work. For about $1000 you can setup a business in Wyoming or Nevada. The big boys will do this and they will continue pretty much unaffected, but they will pay $0 in California taxes. Reducing tax revenue even further. This really hurts the small bloggers who are just starting out and making a a couple hundred dollars a year. They are just screwed.
Amazon is stupid for not fighting these laws. They have the money and the lawyers to take the states to court and win. This is settled law. Mail order businesses have existed in the US for decades and they never had to collect sales taxes. Several Supreme course cases support this position. And essentially, Amazon is nothing more than a mail order business without the paper catalog. However, they choose to instead fire their associates and let them fight it out in court on their own. Thus taking years to get a resolution.
A few hundred dollars may not mean much to some of he elites on the net. But it means a lot to struggling families in a bad economy. Shame on both sides.