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Originally Posted by HarryT
That is absolutely legit, yes, I agree.
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I'm not so sure it wouldn't fall under this:
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Use of Digital Content.
Upon your download of Digital Content and payment of any applicable fees (including applicable taxes), the Content Provider grants you a non-exclusive right to view, use, and display such Digital Content an unlimited number of times, solely on the Kindle or a Reading Application or as otherwise permitted as part of the Service, solely on the number of Kindles or Other Devices specified in the Kindle Store, and solely for your personal, non-commercial use.
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If lending your Kindle to someone else was allowed it would be worded differently. You're certainly not allowed to sell a Kindle full of purchased ebooks, so I doubt you're allowed to lend them either.