True, Prime has pretty much obliterated every other retailer from my memory. It may not make them money directly, but it's a brilliant business move overall. Monoprice and Newegg are the only others that I even try now.
i've been a prime customer for a while as well.. and i love the convenience and guilt free shopping.. but i did notice that prime items are almost always more expensive then very similar items not available for prime shipments. so, the shipment cost is more likely split between amazon and the customer...