I don't see this as a simple black and white matter where one side is right and the other is wrong. Authors struggle to hold on to rights; for those of us who make part of all of our living at this game, those rights are how we feed the kids and pay our mortgages. And Amazon hasn't always been known for playing nice. Some of you may recall how they threw their weight around when they launched their self-publishing business.
Let me also state that I'm not a lawyer. I can tell you what I think, but in the end what matters is the contract and the terms thereof. If text to speech violates a clause in the contract, that's a problem, regardless of whether I think it's a big deal.
With all that said, I'm not too worried about it. An audio book is a performance. I listened to Jim Dale reading the Harry Potter books years ago. (They were my workout books.) That was much more than a voice simply reading me the words on the page. Dale performed that book, often doing a better job than the actors in the film version. This is why audio books are recorded in studios, and are (generally) read by professionals.
Some have pointed out that text-to-speech is a huge boon to the disabled. I agree, but I'm not sure how relevant that is. There's a standard clause in contracts allowing royalty-free audio books to be produced for the blind. Nobody's trying to take that away. If I posted a closed-captioned edition of the new Star Trek movie on my web site and Paramount insisted I take it down, it wouldn't make sense for me to argue that my edition allows the deaf to enjoy the movie, and why does Paramount hate deaf people. (Don't know how well that analogy works, but hopefully it gets the gist.)
On the other hand, the Kindle edition is more accessible, and would make it much easier for my blind friend to enjoy Stepsister Scheme...
I haven't heard the Kindle speech, but I'm told it's better than the synthesized voices of years ago. I know my GPS speaks pretty darn well, for the most part. But that's still a far cry from a human performance. To me, Kindle's text-to-speech function is not the same thing as an audio book*. They're two different beasts, and I don't see it as a huge deal.
I do think this is an area where technology will continue to advance, and the writing business needs to adjust our contracts to keep up. When e-books first started popping up, some publishers tried to claim all e-book rights because the contracts simply weren't written to cover those rights, rights that hadn't existed at all a short time before. As technology advances, agents and publishers and writers need to make sure we all keep up.
So while I could be mistaken and I expect things to continue changing, right now I'm not too worried about this particular issue.
*This is a personal opinion, and does not necessarily reflect the legal technicalities or the contractual details of the rights involved.