Monopolistic behavior, like buying out a competitor when there are very few players, CAN be bad for consumers, and should be stopped.
But price dumping to drive out competitors is fantasy boogieman strategy that basically never works. There has to be huge barriers to entry, for it to work. Because if there aren't, then a competitor can just jump back into the market when the prices rise again. It is just not a profitable strategy for a monopoly to engage in.
Price dumping just result in lower prices for consumers.
Price dumping is a great way to destroy competition and has worked effectively in the airline industry (presumably this fits into your high barrier to entry category). The ebook market is presumably easier to enter but far from easy.
