Short answer: No, they merely pose a tough question: how serious are you about android tablets? And the main target of the question is Google itself.
Long answer: Some hardware-only companies will be squeezed out but others, the bigger and better-run ones, can find ways of trimming their cost structure (or beefing up their products' value proposition) to stay in the game. Others will stay because they see android tablets as a necessary complement to their smartphone business. Even if it is a small loss-leader operation.
Some, though, can afford to take Amazon on, head to head. Samsung, for example, makes their own CPUS, memory and displays and can "sell" them to themselves at cost, if need be. Amazon will aways have to pay a marked-up component price. And since competing does not mean price-matching there will still be room for "some" profit for vendors willing to sell at slightly higher than FIRE prices.
The real challenge is in the upfront design costs that need to be defrayed over volume. If Amazon grows their 22% share even slightly, say to 25-30%, by attacking price-conscious buyers, that leaves the "premium-price" market for the hardware-only vendors. Premium priced models are expected to be feature-rich, which adds to costs, and the market volume will be smaller than the value shoppers Amazon is appealing to so that path will squeeze profits, too. Worse, taking Android tablets into premium territory puts them squarely against Apple, Microsoft, and those same vendors' Windows tablets.
So, no; they won't *all* be squeezed out--particularly the ones with strong phone businesses--but a lot of mid-range vendors will be forced out and will have to try their luck with Windows RT and its very different value proposition. Which puts Google on the spot.
Hence, I suspect that the company that Amazon most seriously annoyed this week is Google, not Apple.
First, because they bought Motorola primarily for their patents. (They're already trying to shop around their cable STB business--good luck getting value for it, though.)
Second, Motorola was available because they were having problems with their cost structure--witness the layoffs. Building Nexus has been seen by some as a way to strengthen Motorola's phone side for a sale of the rest of the hardware business. Amazon's pressure on the generic vendors might now force them to *keep* Motorola--blowing their existing Android model out of the water--or "fire-sale" it to keep their credibility with the hardware vendors. Either way, they lose.
Third, Google is in the Android business as an ads and services play: every KF Amazon sells is a slice of that business that doesn't go to Google. And worse, they are eating away at their business with Google's own tech. (Now they know how Jobs felt about Android.)
Fourth, Amazon's forking and de-emphasis of Android in their marketting point the way for other players willing and able to imitate Amazon. Or at a minimum to partner with service providers (Rakuten must be feeling real good) that can chip in some kickbacks.
Fifth, at least some of the vendors will look at the Android ecosystem as a whole and decide that Windows RT with its Bundled-in MS apps makes more sense if they need to move up-market. Especially when the whole IP dark cloud and patent royalties are factored-in. It won't be a stampede but it will cut Android's momentum.
Sixth, the bigger Amazon gets *within* the Android world, the less control Google has. I strongly suspect Android 6.x will not be anywhere as freely licensed as current versions. Major fork ahead. At a minimum they need to create a value-add package beyond Play to counter Amazon's ecosystem and license it separately.
All-in-all, it is going to be e-x-p-e-n-s-i-v-e to keep up with Amazon and Google is going to have to bear the brunt of the software and services costs if they intend to keep Android a *unified* multi-vendor tablet platform.
In other words, to prevent the decimation of Android tablet vendors Top100 expects, Google is going to have to subsidize them instead of milking them.
Tough choices ahead in android tablet-land.