Unlike the cheap phone you were offered, the Kindle e-ink display uses a newer form of e-ink that allows for more than 2 colors, with a resolution several hundred times the resolution of the phone's e-ink display, significantly faster refreshing, AND which can update portions of the screen instead of the entire screen every time (which was not available on any e-ink product until the iRex illiad which came out in 2007). It's sort of like the difference between the mouse and the elephant.

The processor is not the expensive part, nor is the ram. The fucking display is the expensive part.