I'm not an economist or bitcoin rocket scientist, but a payback of your original investment in approx 2 yrs
(100 wks) is ok if it continued to return that over the lifetime of 10-20 yrs.
You get paid back the moment you sell your share, assuming the market price has not fallen below what you paid for it. Generally speaking the price has risen a lot and has held stable for some time, and I still think they're undervalued, but that's just like, my opinion.
If it gets increasingly difficult to mine BTC and ASICMiner has to buy more hardware to maintain its share
of the hash pool - doesn't this represent investment risk?
Not really, although any investment is a risk. Earlier on, AM took a slice of dividends to ensure they could buy the new hardware they are deploying now. It's all been paid for. They will probably do that again eventually I suppose, but it wasn't much anyway since they are in China and the parts/labor are cheap. It's a
good thing if they do that. It's what you want, otherwise they would have a static hashrate and eventually be engulfed by competitors, whenever the competitors decide to stop taking pre-orders and offer some true competition.
I assume with BFL and knc and Avalon hitting the computing pool, ASICMiner will have to generate more
and more hashing power to generate the same return.
Yes, ASICMiner will, and they can, and they are.
No matter which way you slice it, they hold the advantage over every other manufacturer.
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