err... AAC (not AC3!) is the official, ISO standardized successor to MP3. It's not obscure or proprietary, and delivers higher efficiency and better quality than MP3 at the same bitrates.
You beat me too it - when the general public thinks of Apple, they think proprietary, incompatible, obscure ... even Apple fans think this way (some like it like that).
However, Apple is a huge champion of standardization, in everything from Safari's web technologies, to iCal, to h.264 video, to AAC audio, right down to the UNIX certification of Leopard.
Amazon went with MP3 (the older generation of technology) because it would be compatible with all the devices on the market. There is nothing stopping them from offering their own "plus" version of music in higher quality, smaller file size AAC files, which would work with iPod/Zune/PSP, and a bunch of other hardware (see http://en.wikipedia.org/wiki/Advanced_Audio_Coding#Other_Portable_Players )
Oh, and on a technical note, most audio/video formats are proprietary (in that patents are held and exercised over them) including AAC, MP3, MPEG2, MP4, etc. That doesn't keep them from being standardized formats.