As you've mentioned, and as I concur, your odds of getting discovered in Hollywood are somewhere just shy of your odds of getting beamed aboard the Enterprise. So Amazon's system represents a slightly better way to get a calling-card film made out of your script. Nevertheless, it's a much shittier deal for anyone who's had a script sold or made. So this seems like a one-and-done sort of deal. Get discovered on Amazon, then go get an agent in Hollywood, and eventually, make lots more money than through this system.

Amazon's system needs some way to scale up as the writer's career does. Or else it's always going to be stuck as a AAA farm team for Hollywood. That might not be a bad thing; at least it's a toehold in the business. But it's not going to bring down the system anytime soon.

Unless, of course, the entire cost structure of the film industry changes, and Hollywood stops being able to afford higher-end writers' paydays. Which may indeed happen, sooner or later. Hollywood has a cost-side crash on its hands eventually. It's anyone's guess as to when, but it will happen. Revenues can't keep declining, year over year, while talent costs and budgets keep climbing.