The answer is very simple

Amazon didn't want to expand on Kindle functionality because

1) They were scared people would stop reading books

2) They were scared of it becoming something they couldn't control

3) They have their heads up their asses and think they can make software and hardware better than anyone else when all they can make is stuff like Kindle and Kindle Fire Phone and other useless crap

you know how originally Steve Jobs didn't want an App Store on iPhone

That's what Amazon was like

They are control freaks

EXCEPT

they are useless at hardware and software as far as it comes to devices (Kindle Fire Phone is a good example of how bad, though Kindle is also devolving fast)

Also they can't make a good ecosystem because they screw over everyone they work with

You see it in AWS where they copied and cloned successful AWS companies

You see it in Alexa where they steal ideas from companies in the Alexa Fund etc

It was the same story in Kindle eInk App Store

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We built apps for eInk and all the other developers who worked on its shared the same sentiment we did. None of the developers could believe how bad Amazon were at working with devs

It was the most godawful experience you could ever imagine working with anyone on anything

A) They were so bad at letting apps go out to customers they had to close down the app store

B) For every app that did well they started contacting other developers to clone the App

That's why you saw 2 of everything. One high quality version, and then a cheap clone because Amazon's mindset was to have 2 or 3 of everything that started selling well

So all the early developers who spent money and time on it, instead of getting rewarded, got screwed

C) I had an Amazon guy literally tell me on the phone - You've already made $200,000 this year. Why do you want to make more? Our development costs were not even covered with $200,000

D) We had one hit game in one area. Let's say (just as an example) card games. We had a separate card game pending approval, Game X. They kept delaying it

Meanwhile an Android developer contacted us saying - You guys have this card game. How is it doing? Because Amazon is contacting us saying card games are hot and asking us to make Game X

So, we put in the effort to do R&D and discovered card games were hot

And they stopped our READY FOR LAUNCH app in the same area (card games) and started contacting other developers to make that same app. It's the kind of stuff you can't even imagine a business partner ever doing to you

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E) They kept one set of developers (ones who they thought 'had already made enough money') completely out of launch of the Kindle Paperwhite

So some of the people who invested in their Kindle eInk App Store, they Screwed over by purposefully keeping out many of them from the launch of the new device

What is crazy is they invited other developers to clone the same apps

Many of those were low quality devs from 3rd world countries who were asked to make clone apps. They found some unknown company from India (no disrespect, just implying that it was not some known game studio) to clone our card game app and launch for Kindle paperwhite (while our game was kept out)

So our apps were kept out of launch and meanwhile low quality knockoffs of our apps were sent to customers

We literally had customers emailing and writing reviews complaining 'why is it not available for Kindle Paperwhite'

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you might be talking about the Sony eReader

It was the first mainstream eInk based reader. Amazon takes all the credit but Sony did it first

All Amazon did was get lots of authors to offer free books and use that to get market share. Now everyone thinks Amazon invented eReaders and eBooks

Well, guess in a sense they did as history is written by the winners

Amazon is very good where it can get subsidies from the government (no sales tax, USPS special rates) or where it can make a platform and invite people in and later screw them over and replace them with someone else

AWS is pretty impressive

Sooner or later they are going to run out of affiliates/developers/companies/suppliers to screw over