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A lot of electronics components including the CPU are rated at 160 F (71C) while the battery might be lower (at ~ 60 C). Since it appears most ereaders do not have a fan, they would rely on natural convection to dissipate the heat. I saw the video illustrating how to take apart the kindle 3. The kindle is very compact and thin; a sizable portion of the kindle is allocated to the battery whereas most of the circuit are covered under the EM shield.
With today's technology, sizes of the electronic circuits can be made very small and light weight. However, the biggest challenges of downsizing of electronics are power supply, memory and heat dissipation. Most integrated circuit components utilize a built-in heat sink or have enough air moving to dissipate the heat they generate. Heat dissipation can be even more challenging for compact devices which might have limited internal air space for air movement.
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