To me, it's a downgrade as well. IMO Sony acknowledges this fact by giving it a lower number in their series, just as the 300 is definitely a step down from their 500 series.
I've seen the 600 at the SonyStyle store and although removing the side lighting and glass does bring you closer to the eink and give the reader more clarity, IMO, the reader would be even clearer without the touchscreen and the side lighting still in place. However, glass glare would still be an issue.
Whichever Sony series they're in, I love my 2 readers so much, that I wanted to adopt their baby sister, the 600, and complete the family. I'm sure that bundle will bring just as much joy as her little sister, the 505, and big sister, the 700.