Sort of. Mostly this is just what happens when you build a platform that allows basically anyone to sell something on it. Local businesses have limited space, so necessarily they needed to limit product to trusted brands/partners/publishers.
Amazon has actually made it possible for self publishing to exist. There are a lot of successful authors now that never would have made it in the old ‘local bookstore buys books from publishing house’ paradigm.
But this of course has also opened the floodgates for scammers which utilize those same indie-friendly options to try to exploit people.
I think the issues are a little more nuanced than just ‘local business good, Amazon bad’. Not that I think Amazon is good, I just think there are real, valid reasons why small bookstores (and their large book publishers) had problems.