I agree with your point(s).
But a small nit-pick:
The books are not "all on the Kindle" with the newer softwares.
They are on your account cloud and only the titles (and/or covers) are on the Kindle.
They download when selected and the "on Kindle" copy can be removed from the Kindle when done (or done temporarily).
The indices remain on the Kindle, even when the book is removed locally.
So you will not have to wait for the item to index, next time you make a local copy on the Kindle of a cloud resident item.
But I do understand why people say:
"on the Kindle"
even when they know better because it is a lot shorter and easier to write.
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