Number 2, while conceivable, is probably not the reason given Qualcomm (and other chip makers) include hardware encryption support. Furthermore, this article indicates that encryption is "no longer supported," not that it is just turned off by default (which would be reasonable if performance was the issue).
Yeah, I can't believe someone held some of the Fire tablets in their hands and said out loud with a straight face, "Someone will not think this is trash."
Slow interface at a device or OS level is insta-garbage to me as a user.
Can't agree with you enough! I thought they would have learned their lesson with the Fire phone. As a owner of a company that makes games for tablets, the performance on the new line of devices was noticeably worse than the previous generation.
RE: #2, it's an optional feature which is not enabled by default. And you have to dig for it. I'm inclined to think that the people who dig for encryption on a book-themed tablet are more likely to understand the potential performance ramifications themselves.