I dont think it being in the district is that far fetched. There is an entire area in Northeast that is starting to undergo redevelopment, and amazon could have its choice of desirable land to build a campus on. They could essentially make an entire section of the city theirs. Come live in Amazon-town!
The tech talent is extremely high here, it features three major airports nearby, and Bezos just bought a house here (the most expensive in DC of course). Throw in the fact amazon has a major footprint in Northern Virginia already (houses a significant portion of their AWS infrastructure), and it seems logical. I wouldnt say DC is the favorite, but i also dont think its crazy they are a top contender.
Oh and theres the added benefit in being near the fed government and having an easier time wielding political influence, which is going to be important as amazon continues to expand its offerings/monopoly.