I can't really see this hurting Kindle sales because Kindle sales are already down in the dumps to begin with. They only sold about 200,000 of the first generation and the 2G doesn't really add that much besides memory. I'm sure they would sell a lot more if they dropped the price by half - I definitely would buy one.
Yes, but the problem is you are pulling numbers out of your ass
I personally think this will help Kindle sales. I mean, once you've bought a few books on the iPhone, you'll start to think, "How much better would this be to read on a *real* Kindle? On a large screen that's almost exactly like reading a book, that lasts a couple weeks between charges rather than a few hours?" And you'll already have a few books for it! And iPhone owners are already proven to spend lots of money buying cool gadgets