Amazon has a terrible reputation which may distort who shows up. I have done conducted plenty of interviews for a few company's and having a solid reputation drastically improves the quality of candidates show up.
EX: Microsoft has middle of the road reputation and I know people that would literary consider with them at 120k to be a better option than 140k at Amazon.
There are certainly people who apply to Amazon after having made a couple websites, thinking that Amazon is just a website so they're qualified. What they don't see is all of the intense engineering that happens to keep that website running. A very small portion of our engineers ever write HTML.
Amazon does have a reputation of being cheap (and it's well-deserved), which is probably causing a lot of great devs to avoid the company entirely. That would skew the numbers in favor of less talented devs. However, I don't believe our rejection rate is higher than the industry average. 80% rejection at phone screens is pretty standard.
Edit: Also, for your particular example, Microsoft was _way_ better benefits than Amazon and a better office environment. I can't comment on pay, since I don't know their typical payscale.
My personal experience with amazon recruiters has been poor. At a college career fair they basically shoved off anyone who was looking at internships (while treating full time like they were gold). I've never interviewed with them because I really don't care about a company that won't give me the time of day if it isn't aligned with their immediate needs.
EX: Microsoft has middle of the road reputation and I know people that would literary consider with them at 120k to be a better option than 140k at Amazon.