I'm excited. I have to admit that I really like the Nexus 7, but I can't really get into fiction books unless I see them on something that looks like paper. I can't really explain it, but I'll probably be purchasing one of these things. If only Google Play Books worked on the Kindle :)
I have the same unexplainable perspective on long-form fiction on LCDs, but I think I've actually isolated the hangup: It's the backlight timeout. I don't care whether the light is coming through or bouncing off the screen (your eyes can't actually tell the difference!), but it's the psychological effect of having a clock constantly counting down to when the screen will shut off, requiring that I spend no more than a certain amount of time reading each page.
Increase the timeout then. You're probably already in the habit of manually turning off the screen when you're done with the device, so why do you need it to turn off automatically after a minute or two of inactivity? Especially when modern tablets have battery life measured in many hours of time with the screen turned on, does it really matter if you do happen to forget and it takes five or ten minutes for it to correct your mistake? And if it really takes you more than 10 minutes to read a page on a tablet screen before you touch it again to flip the page, just turn off the timeout altogether.
Your eyes can tell the difference if the backlight is a completely different color/intensity from the surroundings, though. In candlelight, kindle vs monitor/phone is an easy win for the kindle. (Yes, maybe I'm old-fashioned for using candles, but they have a pleasant light which helps me actually get tired enough to sleep). f.lux or redshift helps a bit with monitors, but it's still no competition.
I always end up extending the backlight timeout setting until it doesn't bug me anymore. For me, if I haven't read a page in 5 minutes, it's because I'm not reading anymore.
The Kindle app for Android tablets overrides the normal backlight timeout. I didn't measure it, but it must be at least 5 minutes - more than enough to read a page and not think about the display turning off.
ISeeYou when reading on android or SmartStay in galaxy s3 prevent screen sutting off when they see a face in the front camera.
As a side note, I prefer galaxy nexus as a portable reading device.
