1. I think they ship way more items than many of you think. And with a small staff, individual item packaging is the way to go to make their lives simpler.
2. The deep discounts on the special items tend to make up for the shipping costs.
3. It helps if you can browse through the items on sale all day (no quantity limits) and have a reserve list of items (open in their own tabs helps). That way if you find a screaming $100 deal, you can always add in a $50 item to get to free shipping. But you have to be quick about it.