Fair enough, but I suspect that people who already dropped $200 on a tablet in the last 7 months aren't the target market.
The question is, if you didn't have your Fire, would you spend your $200 on the Nexus or a Fire? What makes the Nexus the "Kindle Killer" is that, at least for now, it does have better specs and I suspect more people will choose it over the Fire. The specs may not be enough for you to want to upgrade, but they are good enough to sway people.
I suspect most Fire owners are happy with what they have, and not only will they not switch to the Nexus, they probably won't upgrade to whatever the Fire is replaced by unless it is a significant jump in specs. I was one of many who bought the First Gen iPad, skipped the 2nd Generation and then upgrade to the 3rd. Only true hardcore gadget people upgrade every generation.