Another bonus that Kindle has over the iBooks app is wider number of devices you can read Kindle books on. Anything that has a kindle reader for it you can read your books on - iPad, iPhone, blackberry, PC, Mac, Kindle, etc.
Although you are correct that the Kindle app has to be loaded onto the device to read the .azw proprietary format I have to respectfully disagree in one respect. iBooks allows the .ePub format which is now a standard e-book file format that is supported by almost* every e-book reading device including Sony Reader, BeBook, IREX Reader, iPhone, and the Nook from Barnes & Noble’s. This gives it a distinct advantage over Kindle.
Other than hardware devices, you can also read .epub books on your desktop or mobile phone using free e-reader software like Stanza, Mobipocket, FBReader (for Linux), Aldiko (for Android) or Adobe Digital Editions.
[*] Amazon Kindle uses a proprietary format (AZW) and cannot read ePub files directly though you can use the free Stanza desktop application to convert an ePub ebook into AZW (or even PDF), a format that the Kindle can understand.
I also have to give mention to Calibre which is a free software program that can format almost any document type into DRM-free .ePub books.