There is absolutely no justification for an informed customer to pick the Kindle Fire over the Nexus 7. The latter is cheaper, has a much better and more updated OS, a lot better app selection, and can still access all the content the Kindle Fire can, except Prime Videos (which can still be sideloaded using an APK from XDA-Devs, the site linked here).
And of course part of the reason is that many people are buying these tablets as gifts. You don't put as much thought into a gift as you would into a purchase for yourself. Not only because people are selfish, but also because during Christmastime you have to buy gifts for a lot of people, and you know yourself better than you know anyone else.
The main reason I root my Androids is for TitaniumBackup and Nandroid.
Although I'm not sure exactly how useful the produced backup will be. More info at http://forum.xda-developers.com/showthread.php?t=1420351