He or she is saying that some people who were not looking for the advanced features bought the iPad because it was the only tablet available beyond some minimum.
My mom (she's a minister) just got an iPad, when all she needed was a handheld device with which she can scroll the text of a eulogy, when she's at a grave doing a funeral. The lowliest of tablets can handle this task, but "iPad" is all people talk about. If Amazon can generate buzz -- and I think they can -- then it would certainly erode sales such as my mom's.
Yeah, a lot of people think they know this market and what people "would" buy, and all of them except the guys selling iPads have been wrong so far. Batting average of everyone else: .000.
"Easy-to-use", which is far from a given on a non-iOS device, doesn't mean anything if there is not an attractive application base.
A lot of price comparisons are based simply on initial purchase price. If you take into account pre- and post-sale service and support, build quality, longterm reliability, resale value over time, to name a few, it's harder to simply compare purchase prices. I think there will also be some people who will end up with Kindle Fires who probably - secretly - wanted iPads. Santa will be able to save a few dollars this year...
The majority of people (that I know) with iPads are using them for consuming content or playing games - something they could easily do for $300 less with a Amazon Fire.
No 3G, not much storage space, lower resolution (as soon as Apple releases iPad's with retina display) and lack of an Apple logo make the Fire inferior, but with a much lower price it could make things interesting.
For what it's worth, I couldn't justify an iPad for $500. I would absolutely consider a Fire for $200 (or a Fire 3G for $250-300).