I find it fascinating that people these days are willing to pay (a premium) for less features or less choice.Well in this case people are paying a lot less for less choice. A kindle/nook/kobo is priced nothing like an iPad.
Having access to both, I too agree eInk is far better for reading. I don't feel like I am paying to have less choice. My nook is a far better reading experience than the iPad. The iPad is a great web surfing gadget, and has some nice games. The fact that they have some overlapping functionality is not that significant, IMHO.
And, I predict these things will be $99 by Christmas, in which case I will be definitely gifting them to my family. I am not paid well enough to be giving away iPads, alas :-)