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The fear was that Apple has blocked applications from the App Store for duplicating the "core functionality" of the iPhone. Even if Amazon announces they're developing Kindle for iPad, that doesn't mean that Apple will let it into the App Store.
Having said that, the fact that the gadget news sites are indicating the Apple iBook app will be a free download from the App Store and not included in the iPad firmware means Apple doesn't see it as "core functionality" and will likely not restrict alternatives.
And ebook reading not being a core function of the iPad fits well with a CEO who said that "people don't read anymore" when talking about the Kindle 2 years ago.
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