Unless you're into content that is more than just ebooks. [1] Or you like to be able to flip from your reading to research [2].
Don't get me wrong: I'm iffy on how large the market is for the 7" form factor myself. But even I recognize that if you're looking predominantly for reading++, it makes a strong case.
>"Staring at a backlit screen like that for hours on end can't be good for your eyes."
... you say on a forum by and for people who generally spend at least 8 hours staring at backlit screens at work and then go home to stare at them some more for their side projects, hobbies and pass-times...
[1] Instapaper, PDFs, CBRs, mixed-media presentations, research papers, etc.
[2] Browsing, reference apps, etc.
I haven't done much validation, but over here (Uruguay), cost is a huge factor in purchasing decisions, so people get the 7' chinese knockoffs with non-authorized Androids, and I've seen a few Kindle Fires (although the user experience is awful outside the United States, it is very US-centric).
Only relatively rich geeks have an iPad, they're outsold 100 to 1 by the chinese 7 inch tablets. Although they ARE a status symbol and highly desired (like iphones and ipods, which lose out vastly to Android here as well).
Edit: added country
So rather than suggesting people want/will be happy with the 7" Chinese tablet, the Uruguay experience is weighing in on whether the 7" Chinese tablet one can afford is better than nothing.
Which is not unrelated, but not quite the same question.
As the internals speed up, and good-enough 10" Chinese tablets arrive, I'd be interested to hear how satisfied people are with the 7" form-factor and how many stick with it rather than moving to 10".
For me, I got used to the refresh flash and it doesn't bother me in the slightest or disrupt my reading. I don't really see the need for a page turn metaphor. The fact the next/previous buttons are right where I'm holding the device is a huge plus in my mind. Devices where you need to swipe the screen to turn a page seem to be missing out on the huge advantage.
The one thing which I absolutely needed to learn how to hack was the margin size. It struck me of a waste of space to have a 20mm margin on the screen. I found a guide to edit a config file on the device and changed to 5mm margin and love it.
That being said, both the Kindle Fire and iPad 2 we have are inside devices only. When going on trips its the Kindle that is always packed with the question of, are we taking the iPad? Oh, yeah, kids want to play Angry Birds.
e-ink just cannot be beat outdoors, I haven't found one active display that works well in that environment.
Only reasons I haven't already got it was some EXPENSIVE surprises recently mixed with kinda hoping they take one more leap in features within the next year to make the upgrade from my regular nook just a bit better.
The idea of using the Nexus 7 as an ereader seems kind of silly to me - surely if you're into ebooks (like I am) then you'd be better off with an actual Kindle. Staring at a backlit screen like that for hours on end can't be good for your eyes.
And I still haven't seen anybody take photos or video conference with it yet, so I have no idea how good that 1.2mp camera is.