Aw, Gene, you're making too much sense! You're right, though, if they want to attract all the big-name indie authors, they would drop exclusivity. I really don't know how it benefits them, anyhow - they're already king of the hill by a large margin, why do they care about us selling on those other puny platforms? I never quite understood that myself. Then again, boy, would there be an influx of stiff competition on Apple, et. al. But I would be happy to take that consequence in exchange for being able to sell on all platforms and have the advantages of KU.
The last time I proposed that in a Kboards thread I got blasted, but I still think it's a good idea. KU readers looking for books don't care whether those books are exclusive on Amazon or not. Amazon could require that they not be listed on other subscription services (which pretty much means Scribd and that Kobo pilot), but other than that, people looking to borrow are looking to borrow. They're not looking to buy on Barnes and Noble.
The problem with Gene's long-term investment analogy is that not everyone takes off on the other venues, even in a year. Someone depending on writing income can't necessarily dump all the KU income, half or more than half of royalties for a lot of us, and wait however many months it takes to catch fire on other other venues--if we ever do. The success stories are mostly people who already had very large followings when they made the move, at least from what I can see. (My ventures into audio are also taking much longer than a year to pay off.)
On the other hand, if one doesn't have to choose between wide and KU, that makes every wide sale extra income, so even if there aren't many, it suddenly becomes worth it.
I'm not sure how much of a difference that would make. If enough wide authors joined KU, their collective impact would probably have to pull in a lot of new subscribers or in order to appreciably benefit the payout, and there would be a lot more competition for the page reads. It's also true there would be more competition for indie sales on other venues.
For readers, the idea is a clear win. For Amazon it probably makes little difference. For authors, it's hard to say. My guess is that prawns like me would still be prawns, and big sellers would still be big sellers. The one thing I'm sure it would do is take the monthly agonizing over KU out of the equation. If KU is essentially extra income (that is, if it doesn't cannibalize sales), there's very little reason not to have it.