I understand the idea. It is just as good as any other, maybe better.
But the tablet market (as re-defined by Apple) is 18 months old.
Some of those questions have been answered.
Why do people buy Android tablets?
Because they want to do something that the iPad doesn't allow, most likely. Transfer files without Dropbox antics, for example. Tether not only where and when allowed, etc. If Android didn't do anything iPad can't - it wouldn't sell. At all. Because the price is about the same.
What the price can do we've seen with the TouchPad firesale.
What does the Fire change?
Most used Android app is Maps/Navigation. Fire doesn't have it. Can it do anything else that iPad can't but Android can? Haven't heard about them. Heck, it probably won't allow even the Dropbox antics!
Now, why would Fire affect the generic Android market, no matter how small?
I can see it double the tablet installed base (affordability). I can see them take away customers from iPad (same reason).
I can see them creating a whole new market of users doing nothing but books, songs, movies and web browsing on the go.
But unless people will get so excited, they will forget what they actually wanted,
I can't see them denting the IceCreamSandwich tablet market...
Diogen.