The Windows Android layer can only install from the amazon store and does not include any google play stuff, right? Is the amazon android app ecosystem that much better than the current windows store?
To answer your second question, very likely. Microsoft would have zero luck populating their own Android store from scratch. It's a win-win for both companies as they're playing second fiddle to the Google Play Store and maybe even the Samsung store. Attracting developers to submit apps requires a large market.
What would be the reason to use android apps on windows besides them not being available on windows? What feature could an android app running on windows do that a windows application couldn't do?
Or maybe I'd even say "people don't like to use terrible app stores unless forced". Unfortunately, all of the commercial ones I have used are really terrible (gPlay, the Apple App Store, the MS Store), though at least on everything but iOS you aren't 'forced' to use them per se, just aggressively encouraged. It's kind of mind-boggling to me that none of them have managed to make an acceptable example, how hard can search + suggest be? Even when they implement wishlist/bookmarking, it's clunky and frustrating.
I don't think Google Play or the Apple App Store are terrible, at least for end-users. They have the apps people want and function as advertised.
The Microsoft Store struggled because initially it was limited to UWP apps. Developers could not easily ship their existing Windows software on it. Microsoft shot themselves in the foot by excluding the store from Windows' biggest selling point: it's extensive library of existing software.
To make things worse, the store has always been a bit...buggy, compared to the contemporaries I mentioned earlier. I have, on more than one occasion, spent half an hour troubleshooting why a game wouldn't download and install, with the store throwing obtuse unhelpful errors.
Hmm, I would say my experience with gPlay is that the signal-to-noise ratio is very high, often even when you specifically know what you're after, it can be hard to find the app you want and not an imitator. It also goes to great lengths to get promo/featured apps and games in front of you, no matter what. Also the filtering leaves a lot to be desired, for example there's no way to look for a game that has no advertising and no IAP, just a purchase price (the cynic in me assumes that's because of Google's priorities). The Apple App Store (I only deal with it on macOS) has fewer, better apps, but even less filtering/sorting, and maddeningly no kind of wishlist/bookmark, so I sometimes see something passing and mean to check it out, but then can't remember and never try again.
It's really hard to say if the Apple App store is good for users since user's have no choice there is no way to know. I know for me, searching for apps on the Apple App store is particularly frustrating. So many bad apps trying to scam people for subscriptions for simple apps.
I could certainly imagine a successful Steam iOS store that had a better experience for games than the Apple iOS App Store. Better reviews, better community, better suggestions, and sales (something the Apple App Store doesn't do AFAIK), more ways for devs to connect with users, better store pages with more options for devs, better categories/tags, etc... Also cross platform so buying some iOS game gets me the same game on Android, PC, Mac, Linux, were appropriate
Also Steam allows adult content if that's your thing.
