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Well you do bring up an important point. At this price level ($700+) it is competing with a number of laptops which have far more functionality. For the moment we'll put the screen type and how it is easier on eyes aside.
Laptop will certainly do much more and include Wifi and other ports at no extra cost. Screen size is comparable too. In fact, for some/many people laptop makes more sense when using more interactive apps like browsing and e-mail.
However, for the most part laptops are limited to 2-3 hour run time. Sure there are bigger batteries and carrying extra batteries, etc. However when using my own laptop even for the most mundane tasks I am always worrying about the battery and how much longer do I have. I find it very limiting, especially when on the move.
Even if I had a small one that is not much bigger than a reader, can I just use it any place for hours? With the reader I no longer have to worry about battery making it much more mobile. My laptop is like having an anchor that keeps it close to an outlet and charger. Very frustrating.
So I agree that for many people a laptop will be more appropriate at the price level. However, I still think these devices have a market as well.
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