No offense intended to anyone's desires, but it seems there is no really proper way to do this without things getting rather involved, as has been pointed out by others. Further, there is no true reference as to what is correct, as published editions have differing page numbers depending on format, type style and font size.
All that said, an option to display a new page number for each page worth of type displayed may not be the worst option(I get how it can be disconcerting to flip the page several times and still be on the same page number according to the reader), but it further confuses annotations, etc which would still have to be based on a type size independent format to maintain the location. Maybe it'd be less efficient, but if they counted annotation locations based on how many words they are into a chapter, they'd only have to store chapter number plus chapter word count? Could get rather wasteful depending on how long a chapter might be and vary from work to work. My guess is that's why they went with a likely arbitrary, but easy to work with number for computers like 1024.
I suppose some standard must exist, and frankly it is little enough to stand a page number not changing through a few screens of text in order to be able to cart a library that I can read in conditions varying from full sunlight to complete darkness around in my pocket!
Now if they'd just make it as handy in terms of being a virtual moleskin notebook... preferably one that downloads into a word processor, publishing program, CAD and schematic package and cleans my lines up at the same time. Spellchecker, grammar, and CAD that knows what I want rather than what I told it to do.
