On a more basic level it means that amazon will fully govern what happens to the content of your kindle whenever you connect to wifi to get a new book. If amazon wants to push an author's update that completely rewrites parts of the book you originally read (this has happened to me), it can. If it wants to delete a book from your library (which has also happened before), it can.

Kindle owners will be left with the choice of maintaining control over what's on their device at the expense of never adding new books, or ceding that control to keep buying or borrowing additional ebooks. I'm not a fan of those tradeoffs.