So what's the open alternative?
I think the Kindle is the alternative (though I wouldn't call it open). From my research it is definitely the best ebook reader currently on the market.
The key is to use it the way you want rather than the way Amazon wants you to use it.
Load up calibre and find the freely available plugins which allow you to strip the DRM from your legally purchased ebooks. You can then back them up to your computer, as well as convert them to any format you like. Should Amazon pull a "we don't want you to have that" on you and delete a book, you simply restore a DRM-free version from your backup.
Legal under the DMCA? I don't know and I don't care.
Another advantage: you can convert to the open EPUB format, edit the HTML to correct mistakes, and then convert back to MOBI format for use on your Kindle. I've done that several times (typos and formatting errors in books drive me nuts).
I finally purchased a Kindle about two months ago once I was satisfied that the DRM/lock-in was easily defeated and I love it. I've loaded it with books I'd previously purchased for Microsoft Reader in LIT format (again only after knowing that the CLIT program would allow me to strip away the DRM) by converting the LIT files to MOBI.