I hail from a place where the worth of 200$ or 300$ for a tablet cannot be justified, where we demand true value for money. So I guess I can look at these without any bias.
I am quite confident that Apple's iPad mini will have better resolution (more pixels, to be clear) in its next version. And you will find yourself saying "yes, more pixels is better".
Perhaps, Amazon is not the greatest competitor that Apple will face. Perhaps, it would be Samsung or Google. Amazon's products will not match Apple's perceived quality. Yet, these things do not change the fact that Amazon's price point would drive down the profitability of Apple products. And that, Amazon's price point will look attractive to certain segment of people (at least those like me, who believe in value for money).