Really the issue is that Amazon is trying to use a single app ("Prime Video") for both the Prime Video service (all-you-can-watch library of limited content) and their video storefront (a la carte purchases of a larger library). They should have split them out years ago, or at least done a better job of segmenting the two.
Completely disagree here. It's kinda like going into blockbuster used to be. You can spend $1 on the cheap movies (eg, the free ones on prime), or you want to watch a brand new major release, you spend more.
Cable has done the same thing for decades. Subscription includes a ton of free content, and you can pay more for PPV or on demand new releases.