A couple of points. As far as the keyboard goes, I don't see what all the fuss is about. I use my kobo to read books and have actually never found myself needing a keyboard, or dictionary for that matter. I am perfectly fine with browsing for and downloading book on my computer and then transferring them to my reader. Wifi would be nice so I could transfer wirelessly but not a deal breaker for me. I usually have 4 or 5 unread books on my reader at any given time so I'm never stuck without a book if I'm not connected.
The only real "upgrades" I would really like to see are faster page turns and jump-to-page. I don't know about everyone else but I use my kobo to read books. Everything else is just fluff.
As for kobo vs kindle. I had a problem with my kobo. I took it to chapters and was provided a new one on the spot. Try that with your kindle. That alone has won my respect for kobo.
As for the cry "why would kobo introduce a new product without perfecting the first one." Give your head a shake. Kobo cannot sit idle in such a fast growing market. Nursing their first reader along while others introduce new price points and new products would kill them. When you buy an introductory product from a new company you have to expect some growing pains. Kobo has been amazingly responsive and supportive in my opinion.
I doubt I will be purchasing the new kobo as I don't need keyboard, touchscreen, wifi or more shades of gray to read a book. When this one dies I'll take another look