The whole point of the Kindle, at least as I perceive it, is to sell more books on the Amazon store. Why wouldn't they let a company like Apple provide yet another interface for their store? If anything, an "iPhone of ebook readers" would increase sales on Amazon.
The Kindle is not an end in itself. The store's the thing. Kind of opposite from the iPhone ecosystem, where the store exists to sell the phone.
Such a device from Apple would have multiple uses. Imagine the 10.1" pad in a magazine-thin form factor on a coffee table, interfaced to your iMac. You could also have an advanced remote control for Front Row, a special multi-touch iPhoto viewer/editor, the same for iMovie, multi-touch oriented apps for Facebook, and a Twitter widget that could float in from the background.
Done right, a device like this could rule the living room!
As the price of eInk drops Amazon can start to make a lot of money by continuing to discount their eInk reader and making it up in book sales. An Apple iReader would add a middle man that would be able to quickly switch to another book store and cut Amazon out of the loop. There is no magic that let's Apple build at lower costs than Amazon so as long as Amazon is willing to take a minor hit they can keep the eReader market. As other company's start to sell laptop's with eInk they can transfort the Kindel into a solid tablet PC.
PS: Amazon does not think of it's self as a book store as much as a large tech company. It's trying to create large margine markets like the kindel not just sell more books. And they have great brand recognision to build off of.
Why do you think they don't? I've been reading books through Kindle For iPhone for a month now. Takes me 30 seconds to buy a book, or download a sample to decide later. Love it.
The Kindle is not an end in itself. The store's the thing. Kind of opposite from the iPhone ecosystem, where the store exists to sell the phone.