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Amazon will not care when people figure out how to hack the ads out of it. They will be a tiny minority of the people buying this model. A Kindle in hand is worth two in the warehouse, as the saying goes.
The rest will be eagerly anticipating all the great deals exclusive to owners of the (unhacked) model, and the $25 of savings up front. Amazon will give them just enough of these deals to make them happy they bought it, and meanwhile they have created a new revenue stream by selling ads. How annoying can ads be when there's no color or animation or sound, and the requirement that the ads be family friendly?
$25 does not seem 'enough' from the perspective of people who would not buy an ad-spewing device in the first place, but by the same token Amazon does not want to give such a large discount that people feel they are paying too much of a premium for an ad-free device.
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