Another thought:
Kindle with special offers is a K3 with alternate firmware.
This does not need to change when K4 comes out.
It would allow them to rundown any K3 inventory after K4 comes out instead of firesale-ing it.
Beyond that I think Tubemonkey is seeing the deal as a lot of people will; as a free Kindle or a Kindle with rebates. Because a lot of those listed deals are in effect rebates.
This is actually a very interesting social experiment--how many people will spend $114 to get a useful device now and a chance to save at least that much over time. Not terribly different from a wholesale club membership or an entertainment coupon book purchase. Too bad we'll likely never know how many people will jump in to this "Kindle buyers club".
It's not the kind of deal I go for but I know a lot of people who will go for it; educated, price-conscious middle-class families. Hmm, pretty much the kind of people buying the new Buicks.
If nothing else, this highlights how Amazon is truly playing a different game than the other reader vendors; we're sure not going to see Sony or the other hardware-only vendors go after this demographic.