The price difference between the two is significant. At least $50 to $70 right out of the box, and the cost of a micro SD card if you actually are going to use what you're paying the extra money for.
Add to that the fact that oob the fire at least has 5GB non-reserved storage vs. the nook's stingy 1GB and I see no reason why moms and non-geeks will rush to buy the nook.
Maybe I'd feel more confident in the nook if b&n had a top notch app store and digital media store to go head to head with amazon, but they don't. (and no I don't believe their hold 98% of the devices storage potential hostage to force users to buy from B&N in order not to be wasting their device is going to prove a big sell with the Mom crowd or anyone else. Non tech people can still tell a major ripoff when it smacks them.)
Keep in mind the Amazon Appstore is basically Android Market, but without any primary dev focus. It has no exclusives and few developers bother to support/update the apps they submit to the Amazon Appstore. Whether this will change with the Fire remains to be seen, but on Android phones, the Amazon Appstore is a complete joke.
AFAIK, the storage allocations only apply to the internal storage? To my knowledge, it doesn't effect the SD card at all, which renders it completely moot.
Yeah, if you think it's just price - Amazon's ecosystem spins circles around what B&N provides and is probably the most compelling thing about it outside of the price. How many people will go to the amazon homepage and see the full screen ad about the fire/kindle versus B&N homepage and stores?
If you are saying that it's just casuals&moms - how many of them are actually going to compare the two? Which website do you think they use more? Amazon.com or barnesandnoble.com?
Amazon's ecosystem is no better than B&N's, I've pointed this out before. B&N's ebook/e-zine market is larger than Amazons and just as accessible and easy to use. Amazon has their own streaming video service, but since both the Fire and Nook Tab support Netflix and Hulu, they're equal.
Just checked Bestbuy.com, and they are selling the Nook Color, which means they sell the full range of nooks and Kindles. So its VERY likely that buyers are going to walk into Best Buy, shopping for gifts for the holidays, and be able to easily compare them side by side.
Your second paragraph is slightly more valid. B&N's site splashes the nook products over the main page too, advertising them prominently. You seem to be under the mistaken impression that B&N is a young, unknown upstart book seller with no market clout to speak of. When it comes to books, B&N is just as well known as Amazon. Perhaps more so, since they've been around longer and an older crowd could very well be more likely to go to a brick store than to hit the web.