Kindles can read a variety of non-proprietary, non-DRM'ed formats. They read TXT, HTML, JPEG, and non-DRM Mobi files directly.
Hack let you convert encrypted Mobipocket files that were intended for another reader so that that work on Kindle.
DRM is not to prevent other files from being readable on the Kindle.
If you read some of the Kindle discussion groups, you'll see people complaining about "no backlighting", and then a few days/weeks later they will be lauding the fact that it has no backlighting.
A revolutionary portable reader that wirelessly downloads books, newspapers, magazines and blogs to a crisp, high-resolution electronic paper display that looks and reads like real paper, even in bright sunlight.