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I've been waiting for this for ages. I just hope it will work across different Amazon domains, because my Kindle is registered on .com but I purchase most of my books on .co.uk. If this won't work, then this option is pretty much useless to me.
I suspect that this initiative might worsen the crisis of traditional bookstores: people who own a Kindle will be prone to buying their paper books from Amazon (where then they may get the Kindle version at a heavily discounted price) rather than somewhere else (where they wouldn't have that incentive.)