That's very disappointing. I understand the need for the markup to identify the book, and that it could be problematic...
However, and I'll be honest, reading life is one of the main things going for the Kobo ereader app. I can get the same or better from iBooks, Kindle, Nook and often am able to get my books cheaper through them. Reading life is the one thing that could have someone convert over to you completely, the states, graphs and achievements are a huge draw, and being able to join in the conversation based on your book, or make a note, etc that is shareable is something no one else can offer.
I understand the need to be limited to your own purchases from a technical standpoint as well as a marketing standpoint, but even if there were some basic features you could enable for the average reader, it would be huge.
For example, you guys are missing out on creating a huge culture with the Harry Potter books, as they are only available direct. Can you imagine What it could mean for you if that could be integrated in? Those books Are more popular than the bible :P