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As long as those extra functions come at the cost of weight and $$, there will be a market for dedicated ereaders. I've seen iPads, played with them, been duly impressed by the Alice in Wonderland app that gives you illustrations that move, sort of. But when it's all over, I still find the iPad too heavy for comfortable reading, the moving illustrations are a distraction, and it costs too much.
If I travelled much, I might get a tablet for make-do surfing of the internet, checking email, and some reading, as a substitute for my netbook (another multi-function, web-surfing device). But for an extended reading session (say, twenty minutes or more) I'd want a light, e-ink device.
And again, it doesn't matter if tablets outsell dedicated ereaders ten-to-one, a hundred-to-one, or a thousand-to-one. They're different devices. They sell about 15-20 million bicycles in the USA annually; they sell about half that many passenger cars. What does that tell you? That Americans prefer bicycles over cars? That cars will eventually be phased out in favor of bicycles? Or does it really tell you, pretty much, nothing?
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