Amazon costs wireless connectivity into the cost of the device, which is also the answer to why such a limited device costs so much.
But the bandwidth used by a Kindle is trivial compared to that used by a smartphone, particularly by an iPhone.
Writing is on the wall for Kindle, and Amazon will have no choice but to open up its format to iPhone/Tablet in a more generalized way than its proprietary reader.
Bottom line is that Kindle has always been a vehicle for selling content. Apple is about to take that market over and Amazon isn't stupid.
Kindle is a place-holder device.
The people with Kindles are more rabid and loyal than the people with iphones.
I think you're wrong about the "writing" being on the "wall" for the kindle. Of course Amazon will open the format to any secure outlet they can, because they want to sell more books, but the truth is that with some minimal effort, you can turn any Kindle into a really, really compelling device for reading just about anything.
If you've never used a Kindle, you don't realize how compelling it is for people who read a lot of books...The transfer methods, the speed and capacity, even the interface are irrelevant to the future of the Kindle. Those things will get better as time goes on, but the single most important feature is the e-ink display. Without that, it's no big deal.
Apple's tablet will be a great device, and it will probably sell a LOT of units, but unless it is an e-ink device (and it won't be), it won't really be competing with the Kindle's audience at all.
Nobody who tries out a Kindle and likes it will get any sort of LCD/LED/oLED-based device "instead" of the Kindle, in the same way that nobody is going to buy a knife "instead" of a spoon.