Kobo can't do anything to correct most of the Kobo Arc's shortcomings but they can do something about the storage. They have just put out a press release promising to bump the Flash storage.
The Arc is still going to sell for retail prices starting at $199, but the base model will ship with 16GB, not 8GB. Kobo is also planning to ship a couple models with 32GB and 64GB of storage woth retail prices for $249 and $299. These tablets are expected to ship on schedule in November. Kobo also mentioned today that the they are working on a firmware update for the Kobo Arc. This tablet will ship with Android 4.0 ICS, and the update will replace that with Android 4.1 Jelly Bean.
This is a remarkable turnaround for Kob0, isn't it? While it doesn't quite match some of the more impressive features of the Kindle Fire HD, it does move the Kobo Arc firmly into the middle of the field for basic tablets. I have not yet put my hands on it, so I cannot say anything nicer, but based on the price and specs it is now one of the ones worth looking at.