In any case, this new subscription service only affects repeating payments right? So Amazon could still release the Kindle without that feature and it would still work with books that you have bought from the store.
Actually lets get some numbers for that.
Gutenberg ebook 11 (Alice in Wonderland) is available in kindle format 131kb. It is a short childrens book.
Gutenberg ebook 2600 (War and Peace) is available in kindle format 2mb. It is properly longer than most books though.
A tale of two cities (ebook 98) is also available, 506kb.
Anna Karenina (1399) is also available, at 1.1mb.
Twenty Thousand Leagues Under the Sea (ebook 2488) is 551kb with pictures, 518kb sans pictures.
So lets say the average book is going to be about 750kb and most people only need access to their three most recent books. That is only about 3-4mb - can't a web app store that much, client side?