Ricky, Sony recently opened the device up to EPUB. Yes, they have a proprietary format, but also accept RTF, HTML, PDF with reflow capabilities.
I'm not one in the "blame it all on Amazon" camp. I think it's good business for them to pursue exclusive content deals and to price content aggressively.
What's good business for Amazon and Kindle customers may not, though, be good for the e-book market overall.
Speaking purely as a consumer, I want Amazon's prices and content in a format that works on my preferred device. Or, I want my content providers to match Amazon's content and prices.
Yes, it was stupid for Sony to come up with yet another format and then attempt to create a retail infrastructure to serve up that format, in direct competition to Amazon. They should have cut a deal with Amazon to sell LRF books... who knows? They might have tried to, but Amazon had a "not invented here" reaction. I don't know.
It boils down to: I don't want a Kindle. I could care less, really, about formats. I want affordable e-books for my e-book reader. I think that describes every e-book enthusiast. The sooner the market adjusts to that universal reality, the better.