I think you are backing him up. Marco didn't say it wouldn't sell, he said it wasn't especially good. The consensus of the reviews I've read is that the Kindle Fire is probably OK if you have low enough standards.
Think about what makes a good eReader:
* Very light
* As small as possible (while retaining page size)
* Long-lasting battery
* Good reading screen
* iPad as an eReader = fail
* Kindle Fire as an eReader = fail
* Most tablets as eReaders = fail
* Standard Kindle as an eReader = excellent
The Kindle has a huge advantage in battery life and some advantage in weight, but neither of those are critical in my experience (iPad battery life is sufficient for a day's use, which is good enough for me, and weight is close enough).
e-Ink and LED screens each have advantages in some lighting environments. For my purposes (indoors, airplanes, low light), LED works better.
The iPad has a huge speed advantage over the e-Ink Kindle, which comes into play for any activity with an eBook that goes beyond "read a page/turn the page". Finally, the iPad has better fonts; especially for technical material, the fixed-width font on the Kindle is incredibly annoying (with e.g. the dot on the "i" near-invisible).
[Full disclosure: I work for Apple, but in non-iOS engineering]
The only thing I disagree with is extrapolating this sentiment into any kind of prediction about whether the Kindle Fire will succeed or fail in the market (which is more related to what people are commenting on his post than what Marco says himself).