Why do you think they named it "Fire?" Because it has lit the match under the rest of the Android market. Sure, there are better features on the "upscale" Android tablets, but in reality, what do the Xoom, Samsung, Acer, RIM, Asus, Toshiba, HTC, and other lesser knowns really deliver that make them $300-400 BETTER than the Kindle Fire. Add to that Amazon's media and app ecosystem (think Apple), the other vendors will be on the ropes with big fire sales by Black Friday.
The same applies to these vendors when compared to Apple on the top side. WHY buy any of these competitors at prices EQUAL TO OR GREATER than the iPad, when you can have the real thing at that price (or even less - listening there Motorola?). They are now unmercifully squeezed between the Kindle on the bottom (with its ecosystem) and Apple on the top side (with its ecosystem). This ain't going to be pretty...