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I'd say yes, a Kindle probably is worth the free books at $80 for entry level. It's a fantastic way to read, and the free books aren't limited to just the classics. Many independent authors that I've come to really enjoy have offered their books for free on Amazon. You can get endless amounts of reading for free or VERY low cost (less than $4 USD).
I bought my mom a kindle for Christmas knowing full well that 95% of what she reads on it will be free or low cost. But she loves it. And she is reading some very enjoyable things.
Big name authors will be higher priced, and while if its something I want to read I will spend the money. That doesn't mean that I don't growl sometimes when the ebook is the same (or nearly the same) price as a physical book or on rare occasion more. So, while I'll spend the money, I do understand the "overpriced" statement if you focus purely on NYT bestseller type stuff.
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