Isn't the point of the kindle to display static content really well, thus minimizing battery consumption? With games being developed for the Kindle, I can't help but wonder what that does do to the batter life expectancy of the device. On top of that, the Kindle has a monochrome screen - it'd be like shelling out $259 for a game boy all over again.
Add on the other restrictions, such as no VOIP or no generic reader software, and the whole endeavor seems kinda pointless.