Unless I'm mistaken, Kindle supports .txt, .mobi, and .prc files, as well as MP3 and Audible audio formats, without conversion or any emailing to Amazon.

Forget "implementation level" versus price point. The demand is there, regardless of what the current implementation level is. Stupid easy access to Amazon's catalog is a huge selling point that the other e-readers can't touch. The iTunes store was a big part of the iPod's success, just as Amazon's store has sold a lot of Kindles, despite the device's limitations. You can't look at the device capabilities in isolation and say it's not worth it. Access to the store's library is worth something, and poeple have voted with their credit cards.