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".
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.