I love the Kobo, but I bought a Kindle and here's why:
I love the Kobo philosophy, their software, and simplicity of their website (especially the price of the ebooks, and frequent coupon codes). But the hardware is way behind the Kindle, and the price point of the hardware doesn't reflect this. If the Kobo was significantly cheaper, or they put out an ereader that even comes close to the Kindle, I would buy a Kobo ereader.
On the other hand, their main market may be app support for other hardware (ie smart phones, tablets...) and selling ebooks.
But I really wish they would put out some better hardware (my dream machine would be the Kindle hardware, with everything else Kobo)