I have just tested the file with my Kobo Glo, and the cover is generated correctly. The home page shows the new book with the cover, the library list shows the cover and when reading and put the device to sleep, the cover is shown. I can't see any problem with it. My Glo is running the latest firmware, v2.4.0.
I don't have a iOS based device so I can't test that.
The only way I could see this not working on a Kobo e-ink reader is if you put it on as a kepub. This means renaming to have the extension ".kepub.epub". When the Kobo readers see that, they are read using a different reader application and the cover images are not generated.
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