One of the negative features of kerfuffles is that the outrage tends to spread a lot farther than the eventual explanation does. Not that this explanation doesn't have its own problems, but it's better than the "lobotomy + homophobia = FAIL" equation people at first assumed.
According to the Seattle Post-Intelligencer, the thing was a consequence of what strikes me as an extraordinarily dumb programming decision. Somebody made an erroneous category-edit in France, and it propagated from Amazon.fr through to all the rest of them. This has more discussion of Amazon's internal operations, and how errors like this end up happening.
What's the line about never attributing to malevolence what can be explained by mere stupidity? I suspect Amazon's site architecture could use some work.