"The main thing stopping me from taking this seriously is the same reason i dont want an ipod. Namely being forced to use 1st party drm out of the box."
1) The iPod doesn't require you to use 1st party drm out of the box. You can use non-drm'd formats too, from the get go.
2) Your moral complaint about iTunes has hardly stopped the iPod's success, so there's little reason to think why it would stop the Kindle's success...