Most importantly, as far as I can tell, it doesn't make any existing smartphone activities easier or faster, nor does it make possible any new category of activity. Games are neat, but who is going to make games for a platform no one is on?

I agree with the other commenter, however, that Amazon is mostly interested in gathering detailed data on how people use their phones, and even a small percentage of the market is still a lot of useful data. They may learn something interesting (those eye-tracking cameras aren't there just for the sake of the UI), in which case they will be better positioned to increase their market share if they want to.