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It probably depends on what "$400-$500" translates into in real-world money. It also depends on what "proprietary format" really means--just Mobipocket, or some Kindle-specific variation? It also depends on whether they are going to rig things so that only the Kindle can access the store.
Since the originally-rumored $50 price tag isn't happening, I'm guessing the store is going to be accessible without the Kindle, because they're not trying to recoup device costs from content sales. That means the store could succeed regardless of what happens with the device.
For me, wireless, Web browser, and keyboard are just useless features that push the price well out of "average joe" range.
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