When the Kindle launched back in 2007, one of its support features was an email conversion service. You could send an email with certain files attached to your Kindle and Amazon would convert the files and forward them to your Kindle.
At the time of launch, the email conversion service didn't support Epub. It didn't matter much; I couldn't make an Epub at that point without doing everything by hand. But it's now 3 years later; Epub is a major document format and it still isn't supported. Why?
They could have supported more formats from the beginning - had they wanted to. For example, it wouldn't have been too hard for them to add support for MSReader (LIT). Open up a LIT file and you'll find all the components you need to easily make a Kindle ebook. I've converted from LIT to Mobi any number of times with Mobipocket Creator (an ancestor to the email conversion service). MobiCreator is quite capable of working from the components of a LIT file.
BTW, the email converter is likely based on KindleGen, Amazon's command line conversion tool. KindleGen works with Epub, so there's _really_ no reason that the email service does not.
I've been thinking about this for a while, and my guess is that Amazon won't support converting from other ebook formats. It's a subtle way to discourage Kindle users from buying in other ebookstores. But it's also discouraging non techie users with existing libraries from moving to the Kindle.
What do you think?