I would settle for a K4 that had the following improvements as opposed to a new touch screen. I too am not that excited over touch screens--tried several and wasn't impressed.
Hardware Improvements that would be nice- A much faster processor
- A better trackpad and keyboard
Firmware Improvements that would be nice- Ability to sideload fonts
- Better built-in book management
- Way more on-device formatting ability
- ePub support (doubt this will ever happen)
As far as tablets go, until they come up with affordable large displays that have 300 dpi resolution, reading text will be a pain. I love my iPad, but not for reading. The NookColor was better, but still not nearly as good as the Retina displays on the iPhone/iPt4 or on some of the Android phones. (My Motorola Atrix 4G has a screen on par with Apple's Retina display.)