I had some hopes for Amazon's e-book device - after all I buy paper books from Bezos via Amazon Prime weekly, I buy Subterranean Press's splendid editions, and I even end up susbcribing to the Folio Society's offers each year. I spend 8-12 hours a day reading screens and 1-4 reading paper books; I should be right in their target market. So I'm really sorry that KIndle is doomed.
I'll keep this short. Kindle requires DRM. DRM destroys value - it makes things do less and cost more, and means they will break suddenly without warning when the service inevitably goes bust.
If you have $400 to spend on a small gadget to read outdoors on, buy yourself an OLPC and give one away to a child elsewhere too. If you are still tempted by the Kindle swindle, read Mark Pilgrim's literary dismissal of it.