That’s way too much money to spend on a device which does only one thing. On top of that, I do not like the idea of DRM attached to books.
I've had my Kindle for a little over a year and I love it. Publishers offer plenty of free to download Kindle books so the book buying doesn't become excessive. Most other books are 9.99 or less (depending on the publisher).
MOST electronic devices only do one thing and are in the same price range - GPS, IPod-type devices, etc.