I really like this concept. I can think of a bunch of ideas to take advantage of this hardware. However the hardware seems expensive. A kindle is only 120$ and

I really like this concept. I can think of a bunch of ideas to take advantage of this hardware. However the hardware seems expensive. A kindle is only 120$ and I understand that amazon subsidizes them but what is the difference? I don't understand why the server is needed. Can you use it without the server?