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Multifunction and converged devices generally do well in markets, specifically, because they provide more services to more people. This is why companies add features to devices, to make them appeal to more consumers.
Those who appreciate multi-use devices are also used to the idea that they may not be optimum for a specific task, but they get the job done. This has been true for electronics for as long as there were portable devices, is true today for smartphones especially, and will be for future multi-function devices. Many people read on these devices today, and are perfectly comfortable doing so, because they got used to whatever idiosyncrasies were required of the device, and now it is second nature to them. (Count me among that group.)
When a multifunction device or devices are a major part of the market (and are made well enough to be popular), they will crowd out single-function devices, and force them into smaller and smaller niches. This is what the dedicated readers can expect out of their future... like the small cellphone that is marketed as being good for "nothing but making a phone call," and sold in drug store racks and oddball catalogs like "Things You Never Knew Existed."
And you should expect the dedicated readers to start sprouting new features as well... essentially and eventually eliminating their "dedicated" status to an "optimized" status: Optimized for book reading, and other useful functions that the book reader wants.
And then there will be no "dedicated" readers at all.
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