Yeah I was a little disappointed with the Amazon announcement. The Fire is a mix bag being Amazon's own spin on Android, whereas I suspect I would prefer something closer to the main tree, and with the next version of Android -icecream sandwich just around the corner I do wonder about it being stuck on a base two versions back (not to mention the Silkbrowser which creeps me out).
The new eInk readers were likewise a mix bag. I feel like Amazon has over complicated things for the consumers with so many options in not just models but variants within said models. When there are flowcharts (
http://theunderstatement.com/pick_your_kindle) needed to help you decide I feel like you've done something wrong. I'm also not a fan of the design; the silver has the sense of being different for the same of being different (aka looking different to last year’s model). I always find that silver paint/finish tends look old, scuffing/scratching worse than the base plastic colours like black or white.
Anyway as to pricing, as others pointed out the pricing isn't necessarily all that better once the odd Ads versions are taken into account. That said as MechR mentioned these do have an effect and I've seen many a news post with $79 Kindle in the title (or $99 for the Touch model). To be able to say starting at $... has a strong marketing pull, and with their already strong brand and market share it's things like this that will continue to squeeze the other players.