[rogue_red]

Amazon has the ability to remove ebooks you have already paid for from your kindle without your consent (see here) and even 'kill' your kindle (see here). It is for these reasons I have no problem cracking the DRM on my purchased content. I don't do it to rip them off but rather to protect my rights as a consumer. When I buy an ebook I should be able to back it up how and where I want, read it how and where I want.
You cannot afford to be naive when it comes to Amazon because you never know when they are going to introduce yet another limitation to your rights.

This from their current terms and conditions

Amendment. We may amend any of the terms of this Agreement in our sole discretion by posting the revised terms on the Kindle Store or the Amazon.com website. Your continued use of the Kindle, Digital Content, Service, or Software after the effective date of any such amendment constitutes your agreement to be bound by such amendment.

They could potentially kill your Kindle reader for having kindle formatted ebooks you haven't purchased on it. Remember Amazon knows everything you do on your Kindle reader...
From Amazon

We automatically keep an archival copy of your Kindle books-—re-download for free, anytime. We even back up your last page read and annotations, so when you re-download to the device you can pick up where you left off with all of your notes still in place.

and from their current terms and conditions

Information Received. The Software will provide Amazon with data about your Kindle and its interaction with the Service (such as available memory, up-time, log files, and signal strength). The Software will also provide Amazon with information related to the Digital Content on your Kindle and Other Devices and your use of it (such as last page read and content archiving). Annotations, bookmarks, notes, highlights, or similar markings you make using your Kindle or Reading Application and other information you provide may be stored on servers that are located outside the country in which you live. Any information we receive is subject to the Amazon.com privacy notice located at www.amazon.com/privacy.

and if they don't like what you're doing Amazon can...

Changes to Service. We may modify, suspend, or discontinue the Service, in whole or in part, at any time.

Termination. Your rights under this Agreement will automatically terminate if you fail to comply with any term of this Agreement. In case of such termination, you must cease all use of the Software, and Amazon may immediately revoke your access to the Service or to Digital Content without refund of any fees. Amazon's failure to insist upon or enforce your strict compliance with this Agreement will not constitute a waiver of any of its rights.

I don't own a Kindle although I do have Kindle for PC and I backup my content by simply copying everything in 'My Kindle Content' folder to my chosen backup location.

I suggest that rather than downloading content directly to your Kindle device that you use Kindle for PC which you can use to sync items to your device if you wish. At least that way you will be able to backup all your content, purchased and 'gifted'.

Personally I wouldn't own a Kindle. I value my privacy and rights too much.