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At the moment the download for transfer by usb option downloads .azw3 files even for later Kindles that support kfx. Amazon shows no signs of changing this as yet. The utility in having a Keyboard model is that if Amazon does make such a change it does not support kfx at all, and is unlikely to be able to do so given the hardware limitations. My understanding is that kfx support is not currently implemented on any Kindle before the Paperwhite 2, though I imagine it would be far more feasible for Amazon to add kfx support to a PW1 than a Keyboard.
As things now stand, even if Amazon drops the download for transfer by usb option altogether, Kindles from and including the Keyboard to the Paperwhite 1 will still themselves download azw3 files.
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