If you open an old box, you could pull out 150 year old books. You instantly understand what they are, and can read them. Pull out a box of digital media from 30 years ago, and you may very well not be able to access it at all, and you won't know what is on it until you did hook it up, assuming you could hook it up. If someone finds a box of 8" floppies, how likely is it that they are going to find an 8" floppy drive, hook it up to their computer to see what is on it?
Paper books do have advantages, and if they go away it is a loss. It may be a worthwhile loss, but a loss nonetheless. In any case, even though I have a Kindle, I benefit from the Nook being on the market. More competition is better for consumers.
Microsoft probably wouldn't prop up the Nook if it was losing money, but they could reorganize it so that it makes money. Clean house and reorganize.