Analytics can be done less granularly and still benefit the user. Also, surely not every data point collected is used to benefit the user.

For example, Amazon doesn't need to know where I am when I request a definition or translation. If they're concerned about usage, they only need to know how many times I actually used one or both of those features per day, per week, or month. They don't need to know instantly every single time a word is highlighted.

They can but they're often much more than that.

Also it should really be opt in. Our at least opt out. I hate Amazon looking over my shoulder while reading a book.

The word choice we want here is directly vs. indirectly.

I'm surprised you'd say that. Out of interest, how does analytics help websites not use blathery, unhelpful text in overly-small fonts, done too-pale to make them unreadable. A lot of UI failings are of this most basic kind.

When you play an online slot game where you bet money that some numbers will appear on screen, and they use analytics to "improve user experience" (read: engagement, read: you losing more money), is that benefiting you or is it benefiting them?