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The e-reader article almost seems like it was written five years ago.
While it's true that heavy reading is a minority pursuit (only about 10-15% of the population reads more than 25 books a year), that's 30-40 million people in the US alone. A large enough market on its own to sustain e-readers. Particularly at the sub $200 level.
Last February (when the iPad was announced), and April, when it was released, everyone on the Internet was proclaiming the death of Kindle (and, presumably, all e-readers). These claims were, of course, spectacularly wrong, as the spectacular success in 2010 of the Kindle, and of e-books, generally, has shown...even despite additional handicaps such as agency pricing. Even more interesting is the fact that the iPad has been extremely successful - but even many people who bought an iPad also bought a dedicated reader.
It seems to be the case that heavy readers will pay extra for a dedicated reader if the reader offers some advantage over existing tablets. Since e-ink does so, and a large number of readers have already demonstrated their preference for e-ink over other commercially available screens, there's no evidence that the mere availability of convergent devices will doom e-readers...and plenty of evidence that readers prefer e-ink over existing technology.
Of course, if a tablet comes along that is as good as e-ink, I might end up getting that, and I don't think I will care about a dedicated device...as long as the reading experience is as good as on a dedicated device.
But if you make a convergent device that reads as well as a dedicated e-reader, the device must *also* not make any compromises in its tablet functionality. As the 85% of nonreaders (at least) won't accept a tablet that is inferior to existing tablets in terms of display, battery life, etc., simply to provide a functionality that they don't care about. And, for that matter, I don't think that a lot of readers would care for that either: I, at least, would like the best e-reading experience *and* the best tablet experience.
Plus, non-readers aren't going to want to pay a significant premium ($100-$200) just for the ability to read novels on their tablets.
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