EInk Kindles can't really do email, or twitter, or skype or angry birds. Right now I tote around three devices (four when I haul my laptop.) A smaller iPad means I get rid of the Kindle and the iPod touch.
I have used the GoodReader app on iTouch/iPhone and read about 10 MB of txt files so far. (The 2001 triology, all Stainless Steelrat, the Red/Green/Blue Mars triology, a lot of Heinlein, the Ringworld triology)
I find the iDevice very easi to read on. Perhaps e-ink is even better.
I don't know if this is rare or not, but e-ink hurts my eyes with every page turn (when the page gets erased and re-displayed). On the other hand, I find reading on the iPad a pleasure, and the mini's dimensions seem to be a great fit.
Graphics-heavy stuff beyond the scope of the Kindle is usually larger format anyway, and even the 10" iPad feels a bit small for that.