While I don't use an Kindle, I'm pretty sure the e-ink screen will still be favored by heavy readers who will find the e-ink superior for reading.
I personally would use this type of device for emags and newspapers vs actual books. The price was very surprising (in a good way) to me. I was betting when they tossed up the $999 on the screen they would make a big deal about price then end up at $799 and get the same Oooo's and Ahhhh's from the crowd. Dropping that to $499 I was like holy ****, that makes everything I just watched that much better.
I have purchased (and returned) several devices such as the MBA, netbooks, tablet media devices (such as Archos 5 and 7) and they all felt rather clunky and cheap, or couldn't handle the load of HD video. Having a 10 to 12" device for video and streaming content is what I have wanted for several years. If this iPad performs as shown it will be a winner in my book.