There's a tool called fakespot which would analyze the reviews and give the product a grade. It has the right idea but I think these professional sellers have circumvented them...

Just like you, I also updated my review when I downgraded my star review. My first attempt was rejected by Amazon and I made my update more brief in order to pass their review process.

I wouldn't say Amazon is turning a blind eye to it - but actually helping the cause in order to get turnover of products. If it hurt their bottom line (just like bad publicity like this would) they'd stop it.