You're argument strikes me more as one trying very hard to find fault where none exists. The 10.1 inch Xoom with it's 16:10 aspect ratio has about 25% more pixels than the 4:3 iPad, yet is physically smaller. That's not an attempt to compare the Xoom with the iPad mind you, just a comparison of a 16:10 with 4:3 device. If you dislike the extra pixels, you can always put some electrical tape or something down the side and "pretend" it has a 4:3 aspect ratio.
As for media content, that's the way of the world my friend. A "general use" device is one that can do, in general, anything. So why would you design a device with as aspect ratio that isn't in line with the vast majority of content, including books? Again, the aspect ratio of the standard paperback today is 10:16, not 3:4. And if you find it distracting looking at an application 16:10, you can always put it in a window.
I am not obsessed with entertainment 24/7/365. What I am interested in is bang for the buck. I don't see why anyone would complain about MORE pixels simply because they were added to the "wrong" part of the screen.
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