Admittedly, my response was focused more on the other beef than that single point. Given how much other information was in the post, I didn't think the 20% == 0% was the central argument; my apologies for missing that.
My core belief that in the long(er) term that the give away likely would have helped the movement and sales of your app still stands though. I think you leaving it in the store for an extra month is valuable data point, but not quite enough for me to categorically agree with "Yep, totally experiment failure, f Amazon!"
Did any reviews come in from any of those massive downloads? How were the reviews? What was the average score?
I would give up the argument completely at 6 months after a few more update releases if there were 0 reviews and 0 sales, otherwise I stand by my original statement that this was a GOOD thing for you and your company.
It is my feeling that you are focusing too much on this bait and switch. Fine, it happened... but you also have your app on 101k more devices than you did the month before so do something with that, flip your perspective a bit and take advantage of it.
You cannot convince me that having your app on 101k more devices in 1 day is a bad thing (except maybe the server costs). It may be scary/odd/unexpected, but you guys are smart, you will figure out some good way to grow from this.