The Fire is more of a multi-media player & browser than an eReader. Many root their Kindle and put pure Android ICS on it. Of course you lose the warranty and can't access the Amazon store, although I've read some have partitions for both.Im still using my kindle 3G and I love it. I bought the leather cover with the built in light and it's great at nite in DR. Its also great to read at the beach - son bought the Fire and he says it's not good at the beach, so he borrows mine.
Have an iPad too but Kindle so much easier for me to read on because just click with the thumb instead of swiping
The price is low because Amazon wants you to join their movie/entertainment service. I doubt they make a dime on the device. Same with their reader. They want you to buy books...which I do.