I think it's a combination of CYA, government regulations, and simplifying operations for AWS. Without an ICP, you're not allowed any web presence in CN, which would require AWSCN to either modify services that are publicly available by default or not offering them. Instead, if they make an ICP a requirement, they have a defensible position with CN regulators, who really just want a throat to choke.
As AWSCN is reasonably far behind compared to Global regions, and they've already enough complexity just doing business in China, so I think it's completely reasonable the trade-off they've made or been forced to make here regarding ICP.
As AWSCN is reasonably far behind compared to Global regions, and they've already enough complexity just doing business in China, so I think it's completely reasonable the trade-off they've made or been forced to make here regarding ICP.