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Sorry for being a bit slow to respond to this one. I agree that the less aggressive option might be best here. I see that there area a ton of comments on that already. You have quite the community there!

Cool. When we launched them separately we overvalued the potential for ticket prices rankings and had so little respect from engines that double ranking was hard. Also, I wasn't as on my game with SEO back then. I think merging is the way to go, I am filing it into our dev. queue for the coming weeks.

That is strange. I have not seen that before in BC. One things that may screw it up is if in your category.html template file there is something wrong. But then you would be seeing issues on all cat pages. BC is pretty quick on support -- live chat and email -- so hopefully they can find a quick explanation.

In addition to what Tyler said about the subdomain having no impact, the issue is that CNAME isn't actually redirecting anyone. So the traffic that is coming to food.amazon.com isn't really directing to food.com. It's merely renaming that page url. In the event that you set it up that way, then sometime later removed the CNAME, and started food.com off on it's own, you would not inherit any of the domain authority from food.amazon.com. You'd essentially be starting from scratch with food.com.