The Android version works just fine and has in-app purchasing. I personally vastly prefer the way Google handles in-app purchases. If you want to use their system, cool, they get a cut. If you don’t want to use their system, that is cool too.
As for why, Amazon has a pretty clear strategy of trying to be independent of Google and Apple. Look at it from Amazon’s perspective. Sure, they are going to lose some sales, but they are also likely to drive some people away from Apple products where they have much less control. Someone who spends piles of money on comics is probably likely to consider making their next tablet a Kindle or (not as good, but still better for Amazon) another Android tablet.
Anything to get out of the sphere of Apple is probably a good idea for Amazon. Google will make some half-assed attempt to compete with Amazon in terms of media, but Apple will go for blood and really leverage their entire platform, up to potentially flatly banning apps that compete too closely and “duplicate functionality”. Building your business on someone else’s business is a dangerous thing. I think Amazon sees putting too many eggs in the Apple basket as being risky, and I probably agree.