I'm hoping e-ink will survive as a niche product if nothing else. My Kindle 3 will need to be replaced sooner or later. I've read articles, etc. which suggest the idea of reading on a backlit screen causing eyestrain is a myth. It's real. I've tried reading on both a computer screen and on my Droid many times. Not fun. I get eystrain and headaches after 10 minutes. For some reason I don't have this problem with viewing video at all, and not nearly to the same degree with web browsing. For reading I'll always need some sort of non-backlit screen. The battery life issue and outdoor reading issue are huge factors as well. I'd sooner go back to p-books than read on a tablet.
My dream device would be a tablet/ereader hybrid about the size of a Kindle 3 but slimmer and lighter, with a 7-8 inch HD touch screen, that can switch between e-ink and LCD screen modes. Maybe one day, right?