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I think it's only a matter of time until the low-end Kindle is under $50.
I wonder if the txtr folks might not have been onto something there about an e-reader as peripheral to a cell phone, though. If the e-reader was reduced to just a screen and the processor duties offloaded to another device, then it would indeed become cheaper. However, having it as an independent device reduces its utility.
But, what if it were like a cover that attached to a tablet and got its power and processing from it? I have no idea how feasible this is, but something like an iPad cover with an e-ink screen would be useful to some, I think.
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