I haven't read the thread because I just don't like going over there.

But, based on the topic alone, here is what I think. Stolen Kindle. . .I would be really upset!
But, as soon as I determine my Kindle has been lost/misplaced/stolen. . . the first thing I'd do is go de-register it from my Amazon account. If the thief had had a chance to buy some books before I get to that, I would think Amazon would refund that money toot sweet. I mean, you have 7 days anyway to ask for money back and I can't imagine it being more than 7 days before I realized my Kindle was no longer attached to me.

I would let them know it had been lost or stolen but I don't think they could do much else. I can't hold them responsible for the theft. . . .same as I can't hold the Martin company responsible if my guitar goes missing. Mind you, I'd file a police report, and make sure they have all the identifying information so that if it is recovered I get it back.
Sienna mentioned a password: I'm of two minds. I can see it as a way to keep a thief from using the Kindle to access my CC on Amazon. But, the only things they can buy are Kindle books. . .so as long as they don't know about the Nuclear one I don't think there'd be much problem since I'd have de-registered it myself right quick, alerted Amazon, and had any book purchases reversed. On the other hand, I think for me it would just represent another 30 seconds of delay before getting back to my book. I probably would not use it for that reason, and I'd be less happy with the Kindle if it was an 'always on' feature.
Just my thoughts, obviously. YMMV*, as they say. . . .
*Your Mileage May Vary