I agree, I have the Kindle app on the iPhone also.
I have the Kindle, B&N, and Stanza all on my phone now. I typically only use Stanza because it fits me the best. I was planning / hoping on ditching all of them for iBooks. I had already stripped off all the DRM and imported them into iTunes and was ready to roll.
Now, disappointment.
People may not realize how easy it is to read on the iPhone, but that's because they really haven't tried it. The screen holds quite a few words per page (not a ton) and the font is NO smaller then a standard book. The backlighting isn't a problem as long as contrast is controlled. I have a much harder time reading on my MBP then on my iPhone.
I am on the go all the time, often taking kids from place to place for one activity or another. Thus I find myself with 1/2 hour to an Hour of free time while waiting for them. I don't want to have to lug around an iPad, thus the iPhone is perfect for this.
My plan was as follows. A) Covert all my reading to digital [done], B) Find the reader I liked the most [done], C) Unify my library into one format [done], D) Read all the major classic novels of our time [working on], E) Migrate to reading on an iPad while at home [pending].
For me, and many avid readers I think that this is the idea. Reading on the go with the iPhone, reading at home with the iPad. But now I can't read on the iPhone with their app. Also there is no reason to buy books from Apple now; in fact, I find it less appealing. Right now I know I can remove the DRM from Kindle books easily. I wasn't concerned with Apple's DRM because I could convert everything else and then just use iTunes. But now, this changes everything.
Looks like I am not alone, there are may people on here who was waiting for this. I look at it this way. Get us hooked, give us something nice for our iPhones. And we will then buy all our books from Apple, AND when the opportunity presents itself, we'll buy an iPad. We win, Apple Wins, woohoo!
Call me disappointed.
