I own a Kindle, and I own a Nook Color. All of them have had their quirks. But none of them have had as many issues crop up as the Kobo Touch has. To be fair, you really have done your best to incorporate the wants and needs of the many, but maybe that isn't the greatest strategy... You might impress people who don't know anyone who owns a Kobo, but when someone asks me what I think of my Kobo, I have to say, "You know, its awesome, it's a great reader, I love the features, but... you need to know what you're doing, and you're gonna have to expect things to go wrong."
Kindle versus Kobo is a bit like an iPhone versus an Android phone (FYI - I own a phone that runs Android)--the Kobo has a lot of flexibility and great features like the Android OS does. But with that flexibility and freedom comes a lot of problems and quirks to overcome. The Kindle is a bit more locked down like the iPhone is, but it runs solid, and it just about never has a problem.
You might lure in some new customers due to the features you're offering, but the word of mouth might kill you.
I've tried to get into the beta group to help things out. I contacted one of the Kobo reps about it, and I was very impressed with how quickly he got back to me and forwarded the necessary info to the guy running the beta test group. But then... nothing. I haven't heard a thing in weeks. Even a response saying, "Hey, we appreciate your interest, but right now the group is full. But I would love to add you when we have an opening," would have given me a sense of... order. But I've heard nothing.
So things are a bit wonky, and I want to be a part of the crowd helping out, but right now I apparently can't do that. And as things stand right now, I can't really be an advocate for Kobo products without some serious misgivings. I like my KT, but I don't want to be responsible for getting someone I know stuck with a serious bug like the ones we've been seeing lately. I play tech support for friends enough as it is.
I like that you guys support expansion via the use of micro SD cards. I like that you support an open standard with your use of ePub--though at the same time, the vast differences in your treatment of "kepubs" versus stock epubs is disconcerting. It's clear to me that Kobo really is trying to make a name for itself as a good company that exemplifies the Canadian spirit.
But... right now... you aren't really hitting the mark.