I think the question should be rephrased to something like "Could the iPhone become an adequate electronic reader?"
Of course anyone can read ebooks perfectly legibly on an iPhone but the whole point of eink is the old 'reflective' VS 'transflective' debate.
The screen on the iPhone is beautiful BUT it emits light and in certain lighting conditions that can be very stressful on the eyes.
It all depends on how you read your ebooks. If you read your books in 15min chunks in a well lit indoor environment then the iPhone will be adequate but for me, in bed with a side light, the iPhone could never replace a device with a reflective screen.
I also think the screen is too small to read novels comfortably.
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