But it's not. At least Amazon haven't positioned it as such. If they had, they'd have sold a lot more units. Keep book prices where they are and sell the reader for $50. That's the printer model. Unless Amazon are making these by hand in Bezos' office, they're definitely making a profit on them. When you sell a printer for $100 with a $100 rebate, there's not really any room left for margin... Amazon is far from the printer model.

People (OTHER people) balk at $259. It's above the impulse purchase price for the mainstream. The first barrier is crossing under the $200 mark. Next the $100 mark. Amazon specifically, may also consider supporting ePub. They're starting to look like a Windows media-only playing music device...