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It's the same way people can buy a subsidized phone, or pay "retail" for it if they don't want to be locked to an expensive contract. Only this time, the device is subsidized by the software is on it.
Basically apple does the same thing - force you to use their app store, their music store, their everything. Except Apple doesn't have to subsidize the price, since everyone wants one already because of Magic.
The Amazon tablet doesn't have to be a dual core 9.7" IPS tablet either. It can't be shitty, but it doesn't have to cost $300 to make to be able to sell for $100-150.
$249-299 won't work either. Because nobody wants a tablet. Unless it's an ipad (Magic), or unless it's a ridiculous deal.
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