When I bought my Kindle, I wanted an eReader, not a laptop substitute. I like my Kindle for reading and my Mac laptop or PC desktop for surfing the Web, using office apps, playing games. At some point, once perfected and made cheap enough so that even I can buy such a device, an eInk colour display might be very nice, but an eReader with an LCD screen doesn't appeal to me.
As for children, I think I would still introduce them to "real" children's books first - but that's probably just my prejudice in that I think the tactile experience adds to the pleasure when one is just learning to enjoy books.
Once you are addicted to reading, like I am, it no longer matters, its the immersive experience of reading that counts.
Holly