Its funny to hear people comparing this to iPad or as an iPad killer. Its none of these. What's truly amazing about this device is the Amazon Silk browser (which supports Flash) and the free Cloud storage for their Amazon content i.e. music, movies, ebooks etc.
You don't really need 3G since watching movies over 3G is really inefficient. Its better over WiFi. If you want 3G, you can get the other Kindle (non-color) option. Maybe the next version might have a 3G option for a few more dollars. But 3G, 4G or LTE, it really does not matter. This just makes it cost more, and that's not the goal. IMO, the goal is to sell this device at a really low price point to get market penetration that will access their Cloud services for the Amazon content, which is where their revenue is.
You don't need more flash memory but it could have allowed people to add more content locally via memory cards etc. But 8G is okay as a start. But the intent really is for people to use Amazon's Cloud service and realize the potential of using the Cloud to do many applications that people would not normally use it for.
By utilizing the EC2 servers, the end users do not need a device with a powerful CPU/GPU or have massive flash memory to run apps like gaming, streaming movies, listening to movies, browsing large graphically intensive web sites etc. Essentially "storing" your Amazon content e.g. movies, music on their EC2 servers.
The servers are like keeping track of your DRM licensing on the Amazon content you've bought. Unless you are thinking of storing it locally on your 8GB flash. But I would ask why the need to store it on your local device when you can access this anyways for free in your Cloud storage as long as you have WiFi access? If you don't have WiFi, usually one would not be storing massive amounts of movies on one's own smartphone anyways. Maybe only one or two. Don't forget this is a portable tablet and not a NAS device.
The EC2 servers does all the work, and reduces the latencies and only needs to send the converted images or gaming video to the device (via WiFi). All the heavy GPU/CPU is processed off-site and rendered on the EC2 servers and passed to the end-user's device.
I think Kindle Fire is an amazing product introducing a very interesting feature in the Silk browser and other apps utilizing Cloud services for all types of media. Really cool and at a great affordable price point.
Panasonic TH50PX60U / Denon AVR-990 / 8642HD PVR/ Panasonic DVD-S77 / Pioneer DV-563A / Playstation3 / Belkin PF60