The ICD Tablet is pretty interesting device. But it will surely cost more than an eink reader and is not optimized for reading. Most unhelpful -- 4 hr battery life.
Provided they reach "critical mass" in time, e-readers can excel as "single purpose" devices in the same way that very basic MP3 players are ideal for jogging and use at the gym or "full feature" digital cameras are more convenient and versatile than a phone for holiday snaps.
There is room for e-reader evolution somewhere in that sub $300 space for a reader's choice" experience that emulates a nice trade paperback while adding font flexibility, multiple formats, modest web interaction, wireless and wifi perhaps, LONG battery life, protected content (and backup), enhanced annotation, enhanced text-to-speech, etc. But the core functionality of pleasurable reading experience must remain bedrock.
My Blackberry can be used as a flashlight -- but I bought it and us it as a phone / sms device which also stands in for email and other tasks like impromptu snaps or quick web hits. My next e-reader (Kindle 2 today) will take e-reading to the next level -- not replace my camera or phone.