They are two totally different technologies. The Oasis is a dedicated e-book reader, with an e-ink screen. It is for reading, and doesn’t do video or emails, etc. The screens are front lit, not backlit, and cost more to produce, for one thing.
Their price points are different because the devices are different. Many users prefer reading on e-ink as its good for use in the sunshine, and is easier on the eyes, especially in a dark room.
IMO it is also a matter of production quantities and competition. The Amazon Kindle dominates the e-reader field at least in the USA while there are multiple competitors in the color screen Tablet field including Android devices ad nauseum that Amazon needs to compete with. Amazon has decided that their e-readers are aiming at the mid to high end of the e-ink reader market while the current Kindle Fire tablets are aimed at the low end of the tablet market compared to the Apple IPad series tablets or Samsung. Thus the new Oasis 7" is in the $250 to $350 price range while the Kobo 7.8" reader is a $230 device for a larger e-ink screen device with similar water proof capability and specifications. The Kobo does not offer "free" 3G or 4G telecom support nor memory over 8 GB so hardware wise is closest to the minimum configuration Kindle Oasis 7" with Special Offers version with the exception of the larger screen.
The Kindle offers multiple options which does add to production cost while the big Kobo Aura 7.8" feature other than the larger screen is variable color temperature screen lighting which is supposed to reduce insomnia in some night time readers. No purchase options other than a cover.
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The Oasis is the Rolls Royce of ereaders. The 10" fire is the stripped down Ford of tablets. Try comparing the price of a Rolls Royce and a stripped down Ford and then take another look. :)
I recently bought a 32 gig Samsung tablet (the A series with the S Pen) and it was right at $350, as I recall. I wanted to get the Rolls Royce of tablets, the Samsung Tab 3, but that was, at that time, $600. Believe me, the Fire 10" is a very cheap tablet.
I have a 7" Fire and when I compare it with my Samsung the difference is huge. It's a bit like comparing a diamond with a piece of flint. Nothing against the Fire. It's worth what I paid for it.