So, there are a few thoughts about the "Fire vs iPad/Galaxy Tab" thing. All of these will be related to the costs of the devices, as I feel this is the majority of the Kindle Fire's draw.
First, many people aren't even sure yet if they WANT a tablet device, or how it will fit into their lives. For these people, a capital outlay of $500 is far too steep an entry point to risk on a device they may not fully utilize. (despite the resale value allowing a reclamation of most of this money) $200 is a much more attractive entry point - plus, Amazon strikes me as a good company offering services I want.
Second, for people with young children (as I have), $500 is a lot of money to risk losing if your toddler or kindergartner gets hold of it and decides to see how well a tablet flies down the stairs with Han and Chewie glued to the screen. $200 is a little easier to get over. In fact, for $200 I'm tempted to actually buy the device FOR them with a rugged case, if there exist sufficient parental controls.
Finally, I don't believe that households in the future are going to just have one or two 'tablets'. There will be tablets all over the place (in a manner of speaking)! These will be ultra-thin, possibly flexible tablets for special purposes like home integration (such as a home automation control panel).
About 5 years ago, I built a nano-ITX computer with wireless, hooked it up to a touchscreen monitor and integrated it into my kitchen for the express purpose of browsing recipes without having to print them out. The motherboard alone cost over half of what the Kindle Fire costs - never mind the $500 15" capacitive flat-screen monitor! If I could have embedded a small, cheap tablet into my cabinets for this purpose, I'd have been all over it! (...and will be - mark my words) Being a nerd who likes to cook, this was - of course - something of a proof of concept with the tech available at the time.
Thing is, if we really move toward pervasive computing in the household, it's not going to be a bunch of $500 tablets all over the place, it'll be droves of cheap, networked thin-client special-purpose tablet derivatives.
Digital picture frames? Forget about 'em! Just buy cheap, networked, centrally controllable thin-client monitor things.
So uh...yeah. [/tangent]