I don't think the problem is so much that they're too diversified, its that their search functionality has done a very poor job of keeping up with and supporting that diversification.
It seems that I only have good results when I search for a specific $productname, and even then I get results for products with user comments reading something like "its not $productname but..." or "get a $productname instead". More frustrating is that these seem to be ahead of what I'm actually searching fairly often.
I really think the root problem is their allowance of 3rd-party sellers to create product listings. There needs to be a "master listing" for a specific product, to avoid the current problem of multiple duplicate listings -- which, like you said, may not actually be product X at all, but is product Y instead. It makes Amazon look like eBay.
Don't even get me started the self-published ebook spam -- is Amazon just ignoring it?
It seems that I only have good results when I search for a specific $productname, and even then I get results for products with user comments reading something like "its not $productname but..." or "get a $productname instead". More frustrating is that these seem to be ahead of what I'm actually searching fairly often.