There will always be books, like there will always be an affinity for records. However the benefits now that e-ink is here far outweigh the cons. as far as I'm concerned the advent of e-books really taking off will be as big as the Gutenberg's Printing Press. And for the one big reason: Once e-books hit a critical mass writers no longer have to go through a publisher to get their wares to the masses. As cheap as binding a book is now a days, and god knows it HAS come down in price, its still far an away much more expensive then distributing a PDF or e-book on the net.
There are some really good web based literature out there that can only be viewed via the net. The problem is there is no good device for viewing such content. A laptop monitor? I think not. A PDA? Close but too small (My iPaq 4700 4" VGA screen is good, yet it still is cramped.
No Apple NEEDS to jump into this market. The big problem though as I see it is the publishers. They are just as bad as the RIAA. Go to most e-book sites. Their wares are almost as expensive as their paper counterpart which IMHO is a load of crap.
PS- And imagine libraries. A certain segment can do it all online. No longer do you need to drive somewhere to get a book. Open up iTMS, enter your library card which will take you to your local library where you can rent books, and audio books (Did I forget to mention the iText will have a 512MB internal storage that has a slider in iTunes that you can divvy up between audio books and e-books.?

I kid you not. I would get down on my hands and knees and lick Steve Jobs's shoes for a e-reader ecosystem from them. *does the whole phone hand gesture thing* Steve. Call me. We can schedule a time and date.