I have both a Kindle 3 and the Nexus 7 (and a horde of PCs). IMO, using an eReader with the e-Ink display is much a much nicer reading experience without question - compared to either N7 or PC and I read a lot of books.
However, the Nexus is a full blown general purpose computer with much more versatility, as you would expect. I use both and have no problem doing so. e-readers are certainly cheap enough that price is no barrier to having both as well. I read on the N7 when I don't have my Kindle handy but feh, not as pleasant, nor does the battery last very long by comparison.
My 32 GB N7 has shown no "screen flicker" other than when you would expect (shutdown, some app loads, etc).