Not to revive an old thread, But there are legitimate, honest reasons to modify a Kindle in such a fashion.
Used Kindles are showing up in pawn shops, police auctions, salvage resale lots from wholesalers and other non-retail origins. These devices may or may not be blacklisted, but one thing is clear- Amazon wants nothing to do with them when they've been reported as lost or stolen. I deal with pallettes full of customer returned/salvage/used IT equipment and multiple times, I have contacted Amazon directly to perhaps reunite a blacklisted Kindle with its rightful owner. Amazon a) will not accept devices back and b) will not release any information about previous owners.
The advice given to me repeatedly was to return it to where it was purchased for a refund if possible. If not possible, it could be used as a web browser or an eReader for free content... their advice, not mine.
As far as the idea that thieves are rampantly jailbreaking, SSHing into and modifying blacklisted Kindles to resell... I've not heard or seen any evidence online to support this, and it's a lot of effort to go through for very little gain. Sure, you have the Craigslist buyers that fail to see if a blank, unmodified device can be registered before they hand their $100 to some guy in a parking lot, but that has nothing to do with system modification and more with Caveat Emptor.
In short, not everyone that ends up with a blacklisted Kindle has nefarious intentions... and thank you guys for providing this information to turn a Paperweight into a semi-functional Paperwhite.
