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I think that the primary reason that Amazon is doing this is to feature-match B&N, even though this "feature" is pretty lame. If they really wanted to best B&N in this particular area then they'd allow lending for 21 days (like a library) or multiple times, to different people.
I agree that the 14-day lending period is probably designed to encourage more book sales from people who don't finish the book in 14 days. But I think that if they really wanted more book sales from lending, they should allow lending multiple times, maybe up to some limit. For every person that an e-book is lent to that doesn't finish the book there is another possible book sale.
IMHO this looks more like following B&N's lead than a really well thought out plan. It makes Amazon look weak by following rather than leading.
Personally, I'd rather see EPUB support than lending.
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