E Commit: Reveal the top card of your oppenent's deck. Either this attack gets -X damage or you may commit an asset with difficulty of X or less (your choice). X equals the revealed card's control.

How can this be torn hero-ed or negated by Red Lotus when you are only playing the dmg reduction? I understand how it COULD, but doesnt the user have to choose to commit the asset first?

Not quite. You respond with Torn Hero/Red Lotus upon the activation of the effect (in other words, when it's played, the starting point). Whereas the choice between damage reduction or committing an asset is decided upon the resolution of the effect (the end point of the ability).

Since there is a possibility of something being committed when the ability is played, Torn Lotus are able to react and essentially decide the effect instead of Amy's.