There's been a whole ecosystem of homebrew Kindle software on and off for a while, some of which add some nice functionality like a better PDF reader. Not sure about current status of efforts, but I played around with it a few years ago and it was reasonably lively back then.

Amazon offers a "subsidized" version with some minimal ads that is $20 cheaper, that suggests to me that they are selling it at cost or at least near it. Incidentally, I kinda like the ads... they aren't intrusive (to me at least) and they have actually have given me some decent recommendations before.