Please be accurate with your information!
"At US$99 you're paying a $20 premium for the KiddieKindle."
That's not true at all! The Kindle for Kids Bundle includes "the latest Kindle without sponsored screensavers". The regular Kindle is $79 but that's with sponsored screensavers. Without those ads, it's $99. It also comes with the two year warranty and a cover. Neither of which you get with the regular Kindle. So if anything, you save money by going for what you call the "KiddieKindle".
Or am I missing something?