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If it's successful it can only be a good thing for the whole electronic book market. When people see the potential to make money they'll throw more money at it and we'll see better cheaper devices. The increased competition should see the cost of the electronic books drop to reflect the true cost savings in not have to print, ship, store, display and return paper books.
If they become the dominant format for electronic books then maybe it will follow the iTunes example where other companies will decide that the only way they can compete is to offer DRM free distributions and Amazon will have to get rid of DRM as well so they don't lose the market. I can only dream.
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