OK I don't actually know how his mind works, but let's look at what he has said in the past...
"No-one wants to watch movies on tiny screens." (Before he unveiled the video iPod)
Flash-based digital music players are often received as gifts, rarely used, and "end up in a drawer." (Jobs, just before he unveiled the flash-based iPod Shuffle)
I believe he said something similar about Apple never making a cell phone, though my Google skills have failed me on that one.
So, in short, this is about as clear a message as Jobs could give that Apple have an e-book reader in the pipeline.