I voted that the cracking of the .lit format will not have any significant impact on the future of e media. I say this because I don't think it will be too easy for people to get the cracker. Further, those who do may find themselves subject to more than the usual scrutiny.
As for the legitimate uses of the cracker, I like the idea that Microsoft may see increased motivation to release versions of its reader for non-PPC platforms. However, I get all of my books from Peanut Press (Palm Digital Media), and I hardly feel boxed in by that fact. There are a few titles I wish I could get and cannot, but most of them are not available in electronic format at all, so I wouldn't be helped by having yet another proprietary text reader.
Regarding authors and publishers feeling unsafe about their products when releasing them online, it is getting quickly to the point where authors and publishers don't have much of a choice as to whether or not to release their products online. Other than books I have to have for classes, I do not buy or read paper books any more. All of my leisure reading is done electronically, using eBooks. There are some authors I have had to stop reading because of this (Tom Clancy, John Grisham, are you listening?). In fact, I found out that Tom Clancy steadfastly refuses to have his work released electronically, solely because of copy protection concerns. The family of J.R.R. Tolkein are in the same old-fashioned, leaky wooden boat. However, a few big-name authors (Michael Crichton, Stephen King, et. al) have made some of their work available electronically, and are profiting from it. To put it simply, eBooks are not just for unsigned authors any more. I think this is the future, and it looks bright, hackers or none.