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How is Kindle 3 superior to these two new challengers?
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It all depends on your measuring stick.
I adhere to the K.I.S.S. philosophy. And using that as my basis... I consider my K2 superior to the K3. New challengers? I don't even know or care what they are.
When it comes time to replace my current ereader, I'll just look for a working used K2--if none of the newer dinguses have made any serious improvements. Since I only use mine to read books (from beginning to end; lather, rinse, repeat), I can't see me being tempted by anything less than a piece of e-paper that responds to retinal commands.