When the demand for paper is reduced, the demand for trees is reduced. Timber prices drop and land becomes more valuable as developmental properties that as pine forests. Cheap land leads to more suburan sprawl, ruining wildlife habitats. Go paper, grow trees.
Paper is essentially farmed. It's not like they're moving across the country like a swarm of locusts looking for new paper sources. So it's not a "demand for trees" argument. There are harvesting/processing/manufacturing/warehousing/shipping costs (hard and environmental) that need to be evaluated in any case. Paper books will be around for some time yet but it's inevitable that paper usage will decline - and that's really not a bad thing.