All I can say is that you're wrong as far as my sample of one and a half, so far as the motivation.
I have one. I got it to read by the pool. It's bright light, so an LED screen is out. Whenever I try and read a book outdoors, the wind is always fiddling with my pages, and it gets annoying. The Kindle is a very nice solution to that. Put it in a Ziploc and you can even read in the tub
Some people (my mom, for instance) would be attracted to a Kindle because they accumulate such big piles of books over time, and a Kindle is seen as reducing clutter. (My mom is most definitely not a technophile and is currently on the fence about me buying her one, because the screen isn't quite white enough.)
So there you have it: convenience of reading in a specific setting, and the avoidance of accumulating piles of books. The motivations of one person who has one, and one person considering one.
I'm curious if you have one or if you know people with one. Did they buy it for the reasons you state? The Kindle frankly doesn't seem to be a gadget-lust kind of purchase to me, mainly because it's so specific to its one function. I definitely think you're off base with "it's more than likely that a large segment of the Kindle buyers aren't much at reading". Since you state it's a device that almost no-one has, it doesn't sound like you actually know too many people with one either. I'll give you the benefit of the doubt and say maybe you do know a couple of especially shallow people who dropped $350 for a device they weren't planning to use. Feel free to cast whatever judgement you wish on them, but I'd ask you not to be too hasty in extending that judgement to the other Kindle buyers, without some data. My own suspicion, entirely unsubstantiated, is that most of the people who actually BUY a Kindle USE it (or if they don't, they still spend a lot of time reading).
I know one person who has one. He bought it because he wanted to see what it was like. Ho hum.
It's ok, but the opposite problem about reading is also true. If the light isn't good, then it doesn't make it. I have a problem using it in the living room, because the light level is fine for what it's used for, and reading books and magazines works well enough. But the Kindle is just too poor to easily read there.
My friend sort of likes it, but I think it's the novelty. He doesn't seem to carry it around when he goes somewhere, and he does read.
It's too easy to stuff a paperbook in a pocket somewhere, and you have to come up with some other less convenient way to carry this, and worry about not damaging it.
I've been reading books on my iPhone, and have no problem with it. I like the fact that with this and my earlier phones, I only need one hand to operate it. Very good when I'm holding a pole in the subway. You can't do that with the Kindle. You really do need two hands.
In NYC I see all kinds of devices. I see many iPods daily. Many. I also see many iPhone/iTouch's.
I see them on the subway every time I'm on it. Sometimes two or three!
I've only see one person with a Kindle. A late middle aged lady sat down next to me and took one out. I was reading from my iPhone at the time, and maybe she saw that and chose to sit there.
Most people are shallow. If they weren't, they wouldn't be buying game machines instead of books to begin with.