I'm not trying to kill anyone's love of books, but I read more now than I ever could before, because I have the ereader app on my ipod touch. To provide the flip point of view to Veri's post, I list here some points to why I now read more:
1. Easy to read - I'm not staring at/near a light source, just reflected light;
I can read in bed with the light off, allowing my wife to sleep.
2. A physical size appropriate to the material - there's an art to page layout, and a technical text is not a fiction paperback;
The fiction is in the story for me, not the page.
3. Can have 2, sometimes 3, pages open at once without the need to resize;
I'm not sure what the above means, but if I am reading it correctly I would counter that I can carry loads of books with me. Sometimes I get tired of a particular story and will pick a new one to read.
4. Can annotate with a comfortable, soft pencil;
Ya got me there. However, I would be loathe to write on any of my books that were not from my university days.
5. Original text and annotations at a fantastic resolution;
*shrug* kind of the same as point 1 and 2
6. Can be taken into the bathroom - how I love to read in the bath;
I read it in the bathroom. Never read a book in the shower though.
7. If lost or damaged, most don't cost the earth to replace;
This is true. But it is also true if I am losing my web browser, contacts book, music player, video player... you see where I am going with this? The one nice thing though... I can quickly replace all the digital content on the new player. I also have the benefit of using the reader meant for computers.
8. Heuristic "I saw it on or around that page" search algorithms quicker by flipping through pages rather than typing in page numbers then clicking forward/back;
Bookmarks and highlights. There is also a search feature. Search "I knew him Horatio."
9. Allows wider overview or review of book or chapter through more aggressive page-flipping, with semi-conscious memory reinforcement;
I'll give you this because I don't even understand what the benefit is.
10. Can lend book for an hour or so to friend in class / on train / at work without giving them short tutorial on how to use book;
I can lend it to someone forever. My son and I often read the same book at the same time and discuss the story.
11. Finding a book on a well-organised bookshelf is quicker than locating and opening an e-book, as well as allowing the eye to take in a huge list of related books with cues on size/shape/etc to help identify and remember them;
There is no way this is easier on a real bookshelf... sorry.
12. Indeed, recollection from a physical book seems easier as information can be associated with a particular page and its nuances: the physical layout, the weight of each side of the book, the angle at which you held it, how easy the page was to open, perhaps a slight change in ink tone, a blemish...
I thinking this is stretching the issue and looking for items to add to the list.
13. A good index is almost always sufficient, and the act of scanning through the index helps either jog memory or provide related words (as better electronic search engines are learning to emulate).
You use an index when reading fiction?
If reading on a Kindle is bad, then reading on an iPhone is like squinting at a text through the keyhole of a prison door - sure, the information is there, and to some people that's good enough, but what inefficiency, sterility, and strain on the eyes!
It's not. You can adjust font size and brightness to suit your needs.
The ipod is also easy to read with one hand. Something I often do while lying on my side. Some other considerations:
- I can get a new book any time of day
- the book never goes into landfill
- I would guess that the carbon footprint for printing a book, delivering it to a store, driving there to get it and return home is greater than downloading the digital copy.
I know a lot of what I have pointed out is a little tongue in cheek, but the original list would be like me going through everything a book cannot do that an iPod can. I think it's great that people are still reading, especially my own kids.
TV which isnt exactly a barn burner. 
