No. Please god no. I don't know how many of you have done e-books but e-books on anything smaller then a 4" screen sucks. HARD.
What Apple needs to do is come out with a dedicated device. Integration seems the only way they can push into another market at this point. (Shades of MS Windows with [insert anything here.] integration.)
What Apple needs to do is form an alliance with E-Reader / Peanut Press and having it integrate with iTMS. Then come out with an e book reader that uses digital ink. This is the tech that can paint a screen then cut power to the screen yet still have the image remain. In cases such as this we are talking WEEKS of battery life. Use digital ink + Apple's standard design flare + iTMS and I can guarantee people will eat it up.
Does anyone know how big this would be? It would be huge. No beyond huge. Literature is as universally accepted as music. It's used everywhere from text books in schools, to training manuals, to maintenance manuals, to entertainment in the home, to entertainment while you are sitting waiting for the dentist. Imagine subscribing to a magazine and having it downloaded off of iTMS like a podcast.
In short I would sell my first, second, third born sons, and cut off a pinky toe for Apple to release an e-book reader. This is Sony's attempt:
No one in the market has done the design right yet. There is this huge market waiting for someone to step up to the plate and get it done right, easy, and elegant. Sound familiar?
But above all please
PLEASE PLEASE dont integrate it into the iPod. It would be doing major disservice to the emerging industry.