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From Amazon's perspective, creating a walled garden may be desirable for the moment, but they might really hurt their long term prospects by doing so. If they did support EPUB at least as an option next to MOBI / AZW a host of other readers could be used to purchase Amazon books. Not with the Kindle experience (for whomever it's a decisive factor...), but nevertheless.
You don't need any special Amazon license to read their paper books; so why tie ebooks to only one device? I really hope they didn't buy LexCycle just to kill the company off but to use their expertise to offer an alternative to their readers on mobile devices as well as the Kindle. It would benefit everybody as the market for ebooks is going to grow for many years to come!
Apart from that, I don't think we are limited to hoping for Amazon only: Someone might come up with a way to add EPUB support to the Kindle without Amazon's consent and the user community might end up keeping the K1 / K2 much longer alive than big A intended :-)
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