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I think a big problem with the Nook tablets was that they had got greedy trying to emulate the Apple own-the-entire-infrastructure model. Amazon managed to pull it off with the Kindle Fire because they had a much bigger company, and the free-app-of-the-day for months to get their Amazon appstore going.
I think if they'd launched the Nook color with Google Market at the beginning we'd have seen a lot more success. When it launched there was a place for a simpler tablet with content (books, movies, magazines) at the forefront and they were way ahead of the game with one of the few 7" tablets (and way cheaper than an original Galaxy Tab at $400ish IIRC). Certainly when the Nook Color came out it was the only reasonable 7" tablet in town - that's why I got one for $200ish while my wife was toting around a giant $400 refurb iPad 1.
If nothing else, they should have given up on their app store and gotten Google Market when the very first Nook Tablet came out, when competition was tightening up.
They were apparently too afraid of people buying Nooks and loading the Kindle app.
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