You are right... these rankings are as manipulated as the S&P with HFT. The FBA'ers use clever marketing, pay per click and paid reviews to get ranked higher. Has ZERO to do with quality.
if by "ranked as #1" you mean on amazon's pages, then that is unrelated to this change. this change is for amazon affiliates (or using amazon's terminology, 'associates') who promote or review products on third-party websites.
I have seen products which are not superior quality but are ranked as #1. Generally best are third or below ranked products.