I doubt they care all that much. Most people with $110 to spend and the know-how to hack a Kindle probably wouldn't consider it worth the time just to save $25.

I doubt they care all that much. Most people with $110 to spend and the know-how to hack a Kindle probably wouldn't consider it worth the time just to save $25. For those who do consider it worth the time, Amazon would probably rather they have a hacked Kindle than no Kindle at all. That being said, I think each Kindle has some soft of hardware ID. If a Kindle sold as ad-supported suddenly stops requesting ads that would probably indicate its hacked. Of course there are a few obvious ways around that, but that tends to be true of any solution short of completely locked down hardware.