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I think Amazon is continually trying to skate the edge of what most of their users actually use on the Kindle, so they can keep their hardware costs at the absolute minimum price they can afford to sell it.
We've lost hardware keyboards, page-turn buttons, text-to-speech, the ability to play audio, speakers and an earphone jack, and the external SD card slot that only the first Kindle ever had, though that was before my time. Anything that may be cool and useful, but that they can ablate without damaging their market share, they'll strip away for what they see as the long-range good of the platform. And credit where credit is due, it seems to be working for them.
Kindles are also the only devices that I'm aware of whose memory size has been going down as the new models come out. I'm fortunate to live in Japan so my Paperwhite 2 has double the amount of memory that a normal one has (in other words, the same memory as my old Kindle Keyboard already has), but even so it's nowhere near enough to fit all my books. Apparently 1.25 GB is enough for your average reader. I'm guessing there aren't enough outliers (like your average MobileRead user) to produce an ereader with all the bells & whistles we'd love to have.
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