Is the eReader Financial Model Upside Down?

Why can't a device vendor go with more of a cell phone model, where the low price of the device is subsidized by the longer-term commitment to buying content? How many Kindles do you suppose Amazon could sell if they priced it at $99, or $49? The device costs more than that to make, not to mention the cellular charges they pay Sprint, so why would Amazon price device so low? Hoping that they...