In reply to Enty:
So just to clarify, if your kindle breaks after 2 months, you get a reconditioned replacement with a 3 month warranty, if that breaks after 4 months in total you've had 6 months of kindle and you're out of warranty?
I have a Sony e-reader, coming up to his second birthday. I love it to bits. I don't keep it in a case, I chuck it around, generally treat it poorly I haven't had a problem (other than a some scratches on the metal case, because I just chuck it in bags and pockets without a case). It cost more than a kindle (£125 I think, this was 2 years ago) and to be honest the only reason I went for a Sony over a kindle was because of the use of a proprietary format.
Without breaking the rules once you buy a kindle you can never really buy anything else without losing your collection - any ebooks bought through Amazon are in a proprietary format that can only be read by a kindle or kindle apps. You also can't buy books from anyone other than Amazon - they don't read .epub which is what virtually every other seller uses as well as libraries and the various directories of free books that are out of copyright.
There are some good points to the amazon DRM compared to others (it allows for returning books, lending them to friends etc). If I buy books they invariably have the adobe DRM which requires use of a shitty program which as far as I can tell is incompatible with my computer hardware, it is far easier to then run the book through calibre and strip the DRM (thus breaking the rules). With the Adobe DRM though they can't take my book off me like Amazon can and there have been cases of them taking someone's entire collection of them for breaking some rules (in a similar manner to someone from Waterstones coming into your house and taking all the books you've bought from them off your shelves), this isn't possible with other DRM. However we need to move away from DRM.
It takes me minutes to remove the DRM from something I buy, if I wanted to share it the inclusion of DRM isn't going to make a difference - except to make me more determined to share it because I hate it on principle. In the mean time it also causes lots of problems for the people who don't strip it (and are also not the kind of people who would be sharing it anyway, either because they don't agree with breaking the rules which is why they haven't stripped it, or because they don't have the technical know-how to strip it or ability to google, in which case they also probably don't know how to turn it into a torrent).
I would think an ereader, if looked after well should last 5 years, maybe more like 3 if like me you don't look after it by any stretch of the imagination. Very much sounds like you've got an easy case for it not being fit for the purpose if it's dying after a year.