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I, too, think that it would make the most sense to get a T1, seeing as you already have a library of epub books.
I really enjoy my T1, and I don't know what the situation is like now, but in the past I have found it easier to find Canadian content in epub format than at the Amazon ebook store (I don't have a Kindle, but I use the Kindle app on my iPad). If you like to read Canadian authors this might make a difference to you.
Also, I personally make good use of the many dictionaries included in the T1, and this to me alone is worth the price of the device.
Here is a caveat, though: you can't add fonts to the T1 (as far as I know, at least without rooting the device), like you can add to the Kobo Touch (as I understand), and I don't think that you can add them to the Kindle, either, so you would be losing that feature. I quite like the Kobo Touch myself (my best friend has one), and I think it's a great device; I wouldn't mind picking one up myself if I find one on sale. The library downloads directly from the T1 through wi-fi are a great feature that you would be gaining in purchasing the T1.
Ultimately, though, I think that both the T1 and the Kindle are great devices and you would be happy with either. With the Kindle and a Kobo Touch you would have the best of both worlds, so to speak - the Amazon store and a device that can read epubs, so that might be something to think about, too!
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