Can't say that I see that myself. IMO, if you would buy this device for $139 instead of an iPad, you should have never even been considering buying a $499 iPad. If this device is what someone is looking for, why wouldn't they just buy the $189 Kindle?
If you read enough books or so much/often that you would pay $139 for the (alleged) advantages of a dedicated eBook reader, comparing it or weighing it against a $500 (minimum) tablet computer doesn't make sense.
I had a Kindle 2, and used it to read some books, and a daily newspaper subscription. When the iPad came out I sold my Kindle and bought the iPad, because it brought so many more of the features that I wanted/needed, and sufficed for the limited amount of reading that I do on it. On top of that, it gives me multiple outlets for book purchases (iBooks, Kindle app, B&N Reader, etc.).
Not bashing the Kindle, or saying that there's no reason to have one. Just don't see how a $139 or $189 dedicated e-reader can be direct competition to a $500 tablet computer.