At this point, I'm waiting for a less bulky 7" Android tablet to replace my PW. One with minimal bezel, like iPad mini, which would make it no larger than my PW and maybe even a bit narrower. Then I'll have something with a slightly bigger, higher resolution screen, with great color, great contrast, none of the weird eInk artifacts, plenty of storage, with a decent web browser. I think we'll see something like this in the fall, if not sooner.
I almost love my PW, but as I discovered this weekend, it doesn't have enough storage to house even that part of my modest technology book reference library that I am actively using (they tend to have lots of screenshots, one is 256MB!) and I miss the TTS. The battery life is not what it is on my Kindle Touch (both are 3G). Okay, so I do prefer to keep wireless on all of the time, but I generally don't have the light turned up very far (10 or less), so I can only assume the battery capacity is reduced, or power management is not as optimized on the PW 3G model as it is on KT. I'm seeing the glass 1/3 empty here, none of these things has kept me from largely sidelining my KT. Just wish I could have spent another $10-20 for a device that maintained the hardware features of KT.
Also I don't think dedicated devices are going to attract as much development resources and innovation going forward, from Amazon or anyone else, simply because it is a race to lower the price as much as possible. I predict the 3G model will go away in the next gen (a 7" Fire 3G will show up), Kindle Keyboard will be retired (they are adding better accessibility features to Fire early this year, the only reason KK is still with us is because it is Amazon's only accessible device right now). With dedicated readers chasing lower prices, we'll see fewer, less significant updates.
If CES 2013 is any clue, we're not going to see improved low cost low power reflective displays (e.g. with color or other magical properties) to replace the existing technology any time soon.
How depressing. Or maybe I just need some caffeine...