Thanks for the details, mrkai. I don't agree though when you say "Fair use" has nothing to do with it. According to
Wikipedia:
Quote:
In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--
1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work.
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Now apply these four factors to a situation where you legally purchase a book from Mobipocket or Fictionwise using the PID of your own Kindle device.
Sure if a user agrees on Amazon terms (which are to be questioned too), this agreement may take precedence over fair use rights.
Also, it may be questioned whether Amazon even has the right to control how I use the Kindle, given that I bought the device (I didn't rent it nor do I have a subscription plan with Amazon) -- legally, it's my own device! Nobody can sue me when I use it as a brick for the roof of my house; nor do I believe could anyone sue me if I put legal content on it, though content that was not sanctioned by Amazon.