Although this video is from a Nook Simple Touch (on android, eink pearl screen), it shows what the kindle eink should also be able to do. This video shows only pure black and white thresholding (no dithering), but still interesting.
We should be able to do this on the kindles too:
EDIT: Without a touchscreen (K3, K4), we could do something similar using the 5-way to move a cursor, and alt-5-way to zoom... Of course, the K5 has a touchscreen.