I've found several reasons. Obviously eReaders are only useful to people who read a lot. If I read only one book a year, or less, I would find the price ridiculous too. eReaders are for those of us who read lots, which probably explains why Amazon is selling more Kindle books than pBooks.
There are those who read lots and get their books from the library. They also think the Kindle is too expensive.
There are those with some sort of nostalgia for reading and can't transfer that feeling to an electronic device. These folks seem to dislike modernity generally.
Then, there are the rest of us.