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It is hard to see what they can do with e-readers to make them more attractive now. There are some small things, more control over font styles, spacing, and formatting, adding buttons to touch screen models, that type of thing. I don't think adding the lighting and all that is going to make a huge difference.
I agree with Jeremy, the K1 sold at an insane price because books were less expensive and so were newspaper subscriptions. I think the recent DOJ Settlements will improve the pricing of e-books and make them even more attractive for folks.
I do think the main audience for an e-reader are people who read a ton and are having storage issues or like to be able to carry a ton of books with them when they travel. Most of those folks probably have an e-reader by now.
For the person who reads fewer books a year, a tablet will work just fine and they do more.
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