And at least with the Kindle Fire it made sense because it could be focused on the book reading aspect of Kindle and provide a better experience than stock Android + stock Kindle.apk.

Now Google has a decent e-book offering, a solid, similarly sized tablet and there really isn't as large of an "Amazon media" leverage advantage with a phone offering (specifically because of the form factor, that is).

My wife (not tech savvy) is in the market for a cheap tablet. I compared the Fire vs. the Nexus 7 with her tonight. She's only remotely thinking about the Fire because we have Amazon Instant w/ Prime. I'm trying to persuade her to go w/ the Nexus 7 so that it'll at least last for a while.

I think the hardware and services have flattened out enough that the only thing that matters anymore is the OS. And Google is winning that race against Amazon.