Which is why it's odd that they seem to abandon their older devices the moment new hardware is released. You can't report passages with errors in them on the KK for instance, because that feature only exists on the Kindle4 devices.
It's possible that the new software couldn't be ported to the older hardware of course, and keeping multiple lines of software current takes more developer resources, but if Amazon doesn't want people to upgrade, then turning their hardware into abandonware seems like it's a counterproductive move.
Amazon makes a virtue internally of doing everything 'on a shoestring' supposedly, this is probably just an external reflection of that I guess.