Jeff Bezos has been clear in many an interview that the sale of the Kindle and the e-book market are seperate business groups within Amazon. The Kindle is there so that people buy the device and than buy books. But the books are their own business entity. If we have hit market saturation for e-readers, and I would not be surprised if we have, we have not hit market saturation for e-books.
Due to the various apps that are available, Kindle books can be read on all sorts of tablets as well as e-readers. So the market for Kindle e-books continues to grow.