I've seen a couple stories from parents who said their kids were more likely to pick up their e-reader than a book. Some of the features (like being able to hear the story read aloud while following along) can help struggling readers too. There are some inexpensive made-for-kids ereaders out there for preschool/kindergarten age. There are picture books and such to load on them too.
E-readers and Ebooks for Kids, a Growing Trend (talks about it a bit)