I think that the attitude of the parents towards reading is likely to be the key as to whether a child takes an interest in it or not.
In the example in your post, I can't imagine a situation where either myself or my girlfriend (also a big reader), money permitting, wouldn't buy the little...
That doesn't surprise me really (well, the 14 month part does).
I think most people that buy a Kindle are going to be fairly heavy readers already, which tends to come with a long-standing love of books.
That said, I do wonder whether the next generation of readers will see things...
I've always read books at home and I can't ever see that changing if I'm honest.
The kindle was a purchase made when I moved into a new job a year or two ago which had a fair bit of travel attached. It's been immensely useful since then.
I'm also the owner of a paperwhite (godsend when travelling for work) and I did have my doubts about the touchscreen element initially but I genuinely can't think of any situations where I've had a dodgy page turn that wasn't caused by my own innate clumsiness.