There are some who have called the iPad the Kindle-killer. Anytime a new device comes out that is similar to one that is already made, many speculate about which one will "win" becoming the dominant device. The iPad won't kill the Kindle.
Apple is definitely trying to compete with Amazon because they are launching iBooks but this device alone is not enough to end the Kindle.
First of all, some people love electronic ink. It looks like paper and is easy on the eyes. Not everyone wants a $500 or more device to read on a screen which they look at all day at work or while watching television. Electronic ink is easy on the eyes and some love it.
The iPad and the iPhone already run a Kindle application. There are no known numbers but many believe there are more iPhone users with the Kindle application than actual Kindles have been sold. This means that users of Apple products are some of Kindle's biggest market base. They already have the application and use it on the phone meaning many will end up still using the Kindle application on the iPad.
There are still Kindle exclusive ebooks. With the competition of other eBook readers on the market, Amazon has attempted to get Kindle exclusive titles. This means that the iPad users will still be purchasing these titles.
The only strategy Apple could take to try to hurt Amazon would be to literally have to cut their customers off of using the Kindle which would be a bad move as customers would not like the change.