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Library books are all well and good, but at this point most have quite limited selections and they can't even get all the major pubs on board at this point. While it's a nice feature (I've used the library for almost 50 books so far) I'm not sure it's that big of an issue for the majority and for the most part folks on Mobile Read are not the majority, they're mainly early adopters who understand formats and DRM and the like.
I'd guess most folks don't want to be bothered with such things (DRM, formats). They want a device the "just works" and to be able to find the books they're looking for when they go shopping and easily purchase them, Amazon does that better than anyone at this point.
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