Amazon is subsidizing the cost of the device through the advertisements. Google subsidizes the cost of email through advertisements. AT&T subsidizes the cost of cell phones through contracts.
I don't understand. Why is subsidizing a device with advertisements suddenly evil?
This is a calculated move on Amazon's part to build a lucrative ad network. This isn't evil per se, but it's certainly not in my best interest as a consumer. Personally, I've done a fair bit to cut down the number of ads I see in a day -- I dropped my cable TV because the number and frequency of ads lowered my enjoyment of the programming. I've stopped buying gas at stations that blare ads from their gas pumps. So, I certainly wouldn't buy a device that wants to charge me extra to not see ads. Out time and attention is more valuable then the shells and trinkets being offered by these companies.
I know it's en vogue to scream "screw this company" when upset with it (re: the recent paypal incident), but given Amazon's broad range of products and services, saying "screw amazon" over a $69 device is a pretty heavy indictment.