That is one ugly-looking device. But if we're trying to compete on e-ink readers, I think the device to compete against now is the Nook Simple Touch. I loved my Kindle when I had one, but after using the NST I realized how rough a lot of the edges on the Kindle are. It really is a clear and solid step above the Kindle, and it's the device you need to compete with for e-ink. Wifi vs 3g doesn't matter; nobody buys books often enough to really truly NEED 24/7 connectivity across the globe. The NST touchscreen is shockingly responsive and totally obviates the need for a physical keyboard.
As for integration with Google Books--while I haven't used GB myself, I read a lot of Project Gutenberg books, and I'm assuming the two are similar platforms. The problem with PG books is that the formatting is just awful for a lot of the ebooks. Sometimes the person compiling the book will slavishly stick to a print edition, going so far as putting page numbers in or other print ephemera; or sometimes the internal coding is so bad that it only looks good on a small subset of readers; or sometimes the book is OCR'd and thus riddled with typos. What I'm saying is, you get what you pay for--and a lot of the free public-domain ebooks are just awfully compiled.
Hell, even some books I've bought from the Amazon store have been very obviously OCR'd with no second thought to ebook presentation or editing--a big example is one of Stephen King's Dark Tower books, which are huge sellers that you'd expect to have been ported to digital with at least a little attention to detail. Not so: the one I bought from the official publisher was obviously OCR'd and so riddled with typos and errors that I returned it to Amazon without finishing it.
So I guess what I'm saying is, I'm not impressed with this device. It's a generation behind the Nook Simple Touch, and integration with Google Books isn't enough to interest me given the awful or non-existent editorial oversight in most public-domain ebooks.