$50? That's like 5 e-books.
And no they are not forking Android. They've just heavily skinned their version. The underlying OS is still the same. It'd be foolish to fork the OS and create more hassles for developers.
It's a brilliant move on Amazon's part. They'll offer a curated app store and a media eco-system that's as good as what Apple's got (maybe even better in some respects....Amazon Prime for example). All without really having to spend time developing the OS (just work on their propreitary skin) on a tablet that's at impulse buy prices.
If the Touchpad has taught us anything, it's that there is a price point at which people will buy a tablet other than the iPad. Amazon just launched a device at that price point. And they've made it eminently more functional and supportable than the Touchpad could ever be.