DRM isn't just designed to protect content. It is designed to protect content within the framework of a particular business model.
Every single "consumer benefit" point you have made is pretty much the same as folks that oppose it. The "but its OK" point for you seems to be the actual content.
This is certainly a most...curious and unusual response to this problem, and it completly glosses over the issue that the Kindle store is being caused to lose "potential sales, money and revenue" with this scheme, revenue they have (heheh) the "right" to earn to support this product and the business model.
"They'll sell more Kindles" sounds a lot like "they'll sell more tickets" or "they'll sell more consoles" or...whatever.
"The vendor of the book is MobiPocket. They will encode a book for any device with a legitimate MobiPocket PID. This tool simply supplies such a PID. It is tied to a specific Kindle, so it's not reducing the "strength" of the DRM on the file at all."
Mobipocket is not authorized to sell books that work on the Kindle. Try going to Mobipoket and buying an AWZ of "I Am America (And So Can You)"
You can't. They aren't authorized for that device and format. A technical "end run" is no different than bypassing CSS on a DVD you bought to make it play on an unauthorized player.
And guess what? The DRM (CSS...the content on a DVD is digital. It is encrypted and region locked to prevent unauthorized usage and to restrict playback on certain devices) is *still on the DVD* when you do this, too. Ask a Linux person about this foolishness.
The restrictions are end-to-end. Flipping the ends to suit your needs then rationalizing why its ok to do so isn't right.
Or...is...it? I'd say we are more in agreement in this matter than I think you wish to admit