Depends what your reference is. E-ink displays without a lot of layers (especially Carta 1250) have pretty good contrast, on par with matte paper. Some devices with a thick frontlight layer and a Wacom layer and a touch layer are less impressive.
My Onyx BOOX has at best a background comparable to very dirty newsprint.
I find myself reading with the frontlight on under most indoors circumstances, unless I'm in direct sunlight. With the frontlight, it's fine. Text may be somewhat more washed out, but that bothers me less than a darkish background.
Under sunlight the contrast is actually about perfect, as white paper tends to be too blindingly bright.
My tablet has several layers: capacitive touch, Wacom, and frontlight, all of which probably contribute to the lower contrast.
Mind: I'm addressing your "bad contrast" question. I find the trade-offs reasonable, and for reading ebooks (as opposed to Web browsing or other app use), the frontlight battery consumption is quite reasonable.
If I'm just using the device casually (e.g., listening to podcasts or checking something quickly) it's fine to use w/o the frontlight, but for immersive reading I'll either have a strong reading light, frontlight, or head for a convenient sunbeam.
It's not really a scam but rather a technology that's still in its infancy. I think of it more like the Palm Treo and Blackberry: they're not great but hopefully we're progressing towards the iPhone. I wouldn't buy one at the moment, though.
We are talking about e-ink without added edge lighting. I found that if I have to crank up the internal lighting of an e-reader to get adequate contrast, then I may as well use a tablet, because it isn’t reflective illumination anymore to the eye.
