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I can get most words from context if I'm not familiar with them but sometimes I hit a word I think I know but I suspect the author is using it in a more nuanced way. I'm glad to be able to quickly look it up without breaking the rhythm of my reading. Reading paper books, I rarely bothered to stop reading and go get my dictionary and I certainly didn't lug it around with me when I was out of the house. I certainly enjoyed reading anyway, but it's a richer experience being able to quickly indulge my curiosity like that. Of course with the Kindle I also have Wikipedia and web searching for references, historical facts and such. Sometimes I'm familiar with the subject and want more depth. Other times I'm not familiar at all. I'm fairly well educated but not to the point where I don't see value in reference materials. I have a bit more to learn.
Besides, there are lots of people out there that may need that feature more than you like students and folks reading in a new language. I figure over the lifetime of the reader, this feature is not adding much cost and could gain them many more customers.
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