Oh I disagree. I have a number of books which I've formatted into rtf, and they're probably the nicest looking books I have on my reader. They are divided into chapters, but no, there are no hyperlinks, just page turns, which is all I want when reading. The size is only slightly more than txt, but they go onto an SD card, so this isn't a problem.
The best thing about my rtf books is the layout: no margins, perfect paragraphing, and any font size I choose.
Each to their own, I suppose.