The LEDs in the Paperwhite Kindles do not shine light directly in the eyes: the leds shine from below the screen towards the top end of the screen. As it exits the LEDs, light is reflected inside a light guide from which it exits towards the display from specific holes, much like a leaky fiberoptic cable[1].
The directionality and position of the LEDs, and the existence of the light guide, are precisely the differences which make the Paperwhite unlike a backlit display.
[1] http://www.nytimes.com/interactive/2012/12/26/technology/lig...