It may not be such a bad idea.
Using the gaming system battle for comparison, I think that Sony may be trying to support the idea rather than a product.
With the latest entry of Amazon into the e-book business as an example, I think that the concept of digital books is growing and Sony has decided (correctly in my opinion) to support the idea of digital books. By expanding support for PDF and ePub formats, Sony is setting itself up as the "system" to have for your casual reading needs. (and by that I mean allowing anyone to have access to books readable by the Sony product vs. the exclusivity of the Kindle books)
To me this is similar to what Nintendo has done with its Wii gaming system. If you are at all familar with game consoles, the Sony PS3 and the Microsoft Xbox console has by far better graphics and better internet capabilities. However, these systems are for the hard core gamers.
For families and casual gamers, Nintendo Wii was (is?) more popular because it is useable by a broader audience and is less expensive.
Likewise, I think the Kindle (and the DX) is geared to the hard core reader and is trying to offer the newest and greatest - whispernet, larger screen, etc. and exclusive access to Amazon books at $x.xx day or night.
In contrast, perhaps Sony is going back to the basics to try and capitalize on the growing market of casual digital book readers, who can get free books from Google (notwithstanding format problems), Feedbooks, MobileRead, etc. And with the depressed market and the lackluster sales of electronic products, perhaps Sony is wanting to put out a less expensive digital reader in order to encourage customers to buy. (The corollary to this idea, however, is that Sony will likely be hurting its Sony Store sales of ebooks)
In summary, does Sony want to go after the person wanting the top of the line (who may not purchase because of the economy) OR does Sony want to go after the person who has just heard about ebooks and wants to try it out.
Someone once said that iPods use to be music players before they became fashion accessories (you had to have one to feel dressed). Perhaps the next item to walk around with, along with your blackberry/iphone/palm pre, is an ebook reader?
Who wouldn't look dashing and "intellectual" carrying around a Sony 600?
