I don't see the Kindle and the 505 as being in the same class, so I don't see them as needing to be equal in price. Even without Whispernet, the Kindle 2 has features the 505 doesn't (dictionary, note taking, TTS, more font sizes). The 505 can read more formats natively and aside from PDF support (for some), I don't think that is enough to justify it's cost.
Of course, for me, the question of ergonomics is opposite from yours because I love the buttons and the keyboard.
Kindle 2 and the 700 are closer in class than the K2 and 505 (IMO).