It starts with iffy logic puzzles, but the browser extension and data it collects is the can’t-miss part of this.
When I interviewed with Amazon (also for a software internship) I assumed this was due to them trying to make cheating harder. After this I had a phone interview, which was run of the mill.
I definitely do think you have the right to say this crosses a personal line, though not the right to be outraged if they don’t decide to make an exception for you, seeing as both they and you have many other options to choose from.
The scenario the author suggests, where there are no other jobs to choose from, makes a lot stronger of a point when you’re forced to deal with something, i.e. the government, but is very false when it comes to companies you’re applying to for an internship/job. If you are applying online to Amazon, you can absolutely apply online to Google, Facebook, etc. And even if all companies required this (Amazon was the only one that did something like this in my experience), I think it’s hard to argue this is morally wrong if having proctors for exams is morally okay.
EDIT: Don’t they also ask you not to share questions? Seems kind of iffy to share them publicly, because it might allow others to cheat.