"It's not happening--we are already at the lowest price points possible for that hardware."
They're probably correct that the current Kindle Fire hardware is as cheap as it can be. As FJTorres pointed out in the comments of that post:
The current FireHD has several premium features (the tuned audio system and speakers, for example) that could be deleted to produce a cheaper tablet.
I could see them hitting $119 and $179 with ads. $99? I doubt it. Not in HD, this calendar year. For that they’d have to stick with the WSVGA screen of the original Fire.
One problem with deleting the premium components from the Kindle Fire HD is that if you take too much away you'll end up with just a Kindle Fire. As I wrote in the previous post, why not save the trouble and just cut the price on that tablet?