Yes, but I don't think they wear off. To begin with the baby poop brown letters don't have enough contrast on the graphite background. I think they fade because I rarely ever use the keyboard.
The number of people complaining or asking about the problem would indicate it's common. Kindle will replace the K3 no questions asked or they will give you credit to buy a NoKey skin. I went with the skin and got a black with white letters and like it a lot.
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