Why is PDF reflow the wrong fix here?
Again, because the PDF format doesn't properly support it. Has nothing to do with the kobo (or any) eReader. PDF is simply not a proper eBook format. It was never intended for such use.
Hmmm... I have no idea what you're talking about. Where are the bookmarks and how are they used? I'm using a wifi device with 1.7.4. The only software I'm using in combination with the kobo is Calibre 0.7.34
Might want to check out the User Guide on your kobo. Pretty sure it describes how bookmarks work - it's all automatic. Do your books not re-open where you last left off? You can read on your kobo, do a sync, and then continue reading on your iPhone, right where you left off.
I don't need a "desktop app" to spend money with Amazon. Why should I need one to spend money with Borders or any part of the Kobo ecosystem? I spent $60 today when I bought 3 Oreilly epubs and they didn't require me to use a proprietary desktop application. Sounds to me like a redesign is in order if the revenue stream is really that dependant on the client side tools.
Understood, but how much of that $60 went to kobo? There's no money to be made in the hardware. Hell, the eInk screen itself costs $90 in quantity. That alone should give you a clue about the margins of eReaders. It's entirely understandable that kobo would integrate and streamline in a process for easy purchase of eBooks which is where they make money. The very fact that the kobo actively supports alternatives like Calibre (oh, did you know the Calibre developer was on the kobo beta team?) is quite remarkable. Do you know why the Kindle doesn't support EPUB? I assure you, it's not a hardware limitation...
Hmm... I've got the wifi running fw 1.7.4 and I still feel a very noticable lag when navigating around and turning pages. Do you feel that performance is acceptable? How would you compare it with the other hardware on the market today? Do we need to start overclocking our Kobos?
How many other eReaders have you used? The original kobo was on par with the Nook for page turns with the Kindle quicker. The WiFi kobo blows the Nook away and is on par with the Kindle, to my eye at least. The eInk technology has inherent limitations. If it's still not acceptable, perhaps consider an LCD based eReader?