I still don't get the rationale for not releasing the app for android devices other than the Kindle Fire line. Supposedly, Amazon makes very little profit on the kindles. Their greatest value is that they offer the easiest access to their content of any device and many of their customers who might be afraid of any other tablet may feel comfortable buying a kindle, knowing that the content they are most interested in accessing, their Amazon Digital Content, is right there, front and center, with great ease of use.
The Kindle E-Book app has been available for a long time on Android and iOS devices and I don't think there is any indication that has hurt sales of any Kindle devices.
Even if the exclusivity provides a minor bump in Kindle Fire Sales, I can tell you with some certainty that some loyal Amazon customers, myself included, have decided to buy all our Digital Video content elsewhere, because of the fact that that content from Amazon is not available on our preferred devices.
IMO, it's a completely boneheaded move on their part.
Personally, I think they aren't just missing out on Amazon Instant video sales as a result, but are also missing out on a potentially lucrative product in the form of an Amazon Instant Video App that non-Kindle users would have to pay for. Given the established exclusivity, I would find it very reasonable to pay $15 for the app for my Android devices. Then, an additional benefit of the Kindle Fire would be that you get that app for free, while people considering purchasing a non-kindle device would have to figure an extra $15 into the price if they wanted access to Amazon Instant Video.
Of course, I'd prefer they just offer it for free, but I would pay if that was the only way they would make it available to everyone.
Now, it is possible that this is a digital rights issue. Vudu is still fighting with the studios for the right to offer HD playpack on tablets and smartphones. Amazon may have only secured the rights with the understanding that the only mobile devices with access would be their tightly controlled Kindle line. That brings up another compromise, though. I'd be fine with SD playback on non- KF devices, until the studios finally get their heads out of their nether regions and allow HD streaming on mobile devices for content that people are paying for. This would also, in the meantime, give the Kindle Fire HD line an edge over other tablets.
There are so many options that seem much more logical for Amazon, and more profitable, than the current status quo, which makes the situation more and more absurd the longer it goes on.