I've heard (since I don't actually own one) that someone bought a Kindle, and a bunch of books on it. When he canceled his subscription to their service, he also lost all those books.
Seems like he didn't actually buy them--only rented them. :)
Yup. That's why you should always have local copies.
I've been creating a DVD of all the books I've purchased/downloaded. It's all set up as a website with links and descriptions of what everything is. Whenever I update the (local) website with a few books, I bump the minor version number, and burn a new ISO.
I decide to put the effort into cracking all my DRM-encumbered, I'll be able to breath a sigh of relief.