On another note, there's book designer Craig Mod, with this discussion of "books in the age of the iPad": Print is dying. Digital is surging. Everyone is confused. Good riddance.
He makes a case for the "canvas" being what's changing: it's not that books themselves are dying, just that the most disposable versions of books are being phased out in favor of digital devices. Books where the canvas of paper is indispensible — e.g., graphic novels, art books — will continue to exist, although at premium prices. Books that are "just text" will simply move to another, more malleable and portable container.
In short, we're seeing another iteration of what happened with books back when cheap paperbacks entered the market and created a priced-down alternative to hardbacks. This didn't phase out hardbacks entirely, though; I've written elsewhere about why hardbacks continue to be important to publishing. (Early access, collectible form factor.)
I'm still iffy on dedicated reading devices, if only because I dislike the idea of throwing hundreds of dollars at something that essentially duplicates most of the functionality of something I already have. The Kindle is twice as redundant now that there's a Kindle app for the PC, which I can install on any machine that has a net connection. Yes, I don't get the (dubious) comfort of reading on the Kindle device itself, but at least I have access to all the same content — and by Craig's own admission, that's what really counts here.