I tried a similar setup. When running on flash disk, it is recommended to mount the root filesystem with noatime parameter to disable updating the access time whenever a file is accessed:
mount -o loop,noatime /mnt/us/debian-armel-750.img /mnt/debian
Other than that, you did not mount devpts. I am not sure what difference it makes:
mount -t devpts devpts /mnt/debian/dev/pts
I wonder how the Debian will wear the flash drive. Flash filesystems have limited number of write cycles. Therefore Kindle mounts most of the file system as read only and creates ramdisks for working file systems. I would strongly recommend this approach with the debian armel on Kindle, but I have no sufficient knowledge of Linux anymore to answer which folders shall be mounted to ramdisks on Debian.
BTW, I don't think you can brick your Kindle as long as the root filesystem is mounted read only.