There are some more economics here, which I'm very familiar with myself.
If I'm putting out a new CD there are a lot of associated costs - for the artwork and printed parts (often extremely expensive, especially if you want to include lyrics to all songs), for studio time, for other musicians and their time and for manufacturing and carriage. Then there are the CDs you won't sell but will send to reviewers and radio stations for promotional reasons (generally at least 100 of these one way or another). So you won't sell all of the 1,000 copies, even if the others shift very fast.
If you use another company to distribute your albums you won't sell to them at the retail price but at a trade price, which can often be as low as £4.50. Amazon isn't ripping anyone else off, simply stripping their own profit margins. If they're selling your album at below the price you sold it to them for, it's their loss not yours. If they're selling slightly above the trade price, it's their profit margin, not yours. It does, of course, make it harder for you to sell at your price of £10 or £12, but they'll be selling to a market you won't normally reach on your own which is why you decided to sell them albums at trade price in the first place.
As to samplers and "best of" albums - they're generally using stuff that's had studio costs etc covered already, and often using cheaper artwork and generally not including full lyrics. Their overheads are consequently far lower. I've started producing "greetings card CDs" which are packaged with a greetings card (surprise!) and themed, taking songs from all my albums with similar themes, and I can afford to do this pretty easily and therefore can charge less for one of these than for one of my "official" albums.
It has to be said as well that buying a sampler or "best of" album will often be a quick way in to buying music from an artist you're less familiar with and can generate other sales in due course.

So, as an independent performer without a label to back me financially or in terms of publicity, I can't see the problem here. In the case of Waterson/Carthy, they wouldn't have borne the costs of producing the album themselves in the first place as that would have been down to Topic, and it's really only Topic that will win or lose if they licence another company to put out "best of" albums.

Anne (Lister)