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That's not strictly accurate - it would only be Whispernet that didn't work, not the Kindle - but Amazon doesn't want to sell you the gadget if it can't sell you books as well.
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Can't you buy books by just going to the website????
I think that is a stupid reason not to bring it out in Europe. If an American goes to Europe, and sits on a beach in Spain, he won't be able to buy books by way of Whispernet either, won't he?
I think the reason is that they just can't handle the extra load (of sales) if they were to sell it world wide.