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Originally Posted by Robotech_Master
It would make more "sense" for them to come out with a new "Kindle reader" that duplicates the Kindle's requirement of having some obscure bit flipped in the normal Mobipocket file to make it work.
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Re-reading the OP I agree on that point. It would be the easiest way for Amazon as they have all books already in that format and probably don't want to hassle with two different formats.
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Thus, the reader would only be compatible with Kindle books, cutting out other bookstores such as Fictionwise or Booksforabuck (unless you did the same jiggery-pokery that you have to do now to get a Fictionwise book onto a Kindle).
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The original Mobipocket reader is already available for many mobile platforms, so if I'm after cheaper books I would simply install both applications and buy books wherever I like. If I really want a book that's exclusively available at Amazon I would buy it there.
On my mind locking users in to their mobile reader software is unnecessary for Amazon: They have by far the widest range of e-books available so customers will come to them anyway.