The jpegs are actually quite useful once I've gone through the process of naming them according to the page number. Very easy to track down a quote because my notes reference a page number.
And not having it OCRed in such cases isn't the biggest deal. The number of quotes I end up using are far fewer than the number I highlight while writing.
But I would never want to have to read a whole book in such a manner.
As for the embedded fonts and heir removal. I'm just imagining a hypothetical situation where many years down the road I'm on a different operating system, there's been some major technological changes. And I open up this PDF and the document won't render because some of he fonts or whatever no longer exist and I can't read it.
The few times I've opened up a word doc on Pages on my iPad I've seen problems.
And every time I try to open up something I wrote as an undergrad back in the early 90s (using MS Write or WordPerfect) the files are messed up.
So a jpeg may be lossy and hard on the eyes, but I know it will always look exactly the same regardless of the environment.