The iPad Mini might be more less convenient, but it's going to last longer, have even brightness, and the text will look great. You might have to hold it farther from your face and make the text a little bigger, but that is pretty much better for your eyes anyway. The Kindle Fire was great to read on, so I can't imagine Apple using a lesser quality display.
I agree with you for the most part, but disagree with this last paragraph. Have people in this thread compared a Retina to a non-Retina Display lately? I own an iPad 2 and own iPhones 4/4S/5 and I honestly dread reading on my iPad 2. Compared to my iPhones, the text looks all blurry. And if I was going to buy an iPad Mini for the sole purpose of reading text, I'd have to think long and hard about what I was getting myself into.
It's great getting caught up with all the hype and the marketing, but as a voracious reader, which I assume most of us are in this thread, I care about my eyes and my comfort. Therefore, I think people should go to the Apple Store and try the mini out before putting their Kindle on eBay. See if you can tolerate starting at the screen; read some white-on-black or black-on-white text and if you don't see any problems with it, then go ahead and buy it.