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You make some good points, but you make a bunch of incorrect statements about PDF. If you generate a PDF from InDesign, you get fully searchable, highlightable, copyable text--OCR is not in the picture at all. And if you export from inDesign with no downsampling, a 3-inch, 300dpi image in indesign is a 3-inch, 300dpi image in PDF--there's no loss there. And as I said, from the PDF source file, using CSS/html to squish 2x pixels into a given screen pixel space (a 400 px wide image gets screen pixel width="200" for example), we get high quality results on the ipad screen (I'm a little afraid of what is going on on the various HD Kindles, but I like the iPad better as a high-density screen standard.)
The issue I'm seeing, as far as I know I can tell is that by allowing the reader software (which is essentially a browser) to resize with HTML/CSS, you can end up tasking the software with rerendering a bunch of pixels into a really small space, so whereas I'm squishing a 400 px image into 200 screen pixels in iBooks and that looks good because the screen resolution is pretty high, it ends up looking pretty bad in ADE on an older monitor due to extreme downsampling and lower pixel per inch.
The more I think about this, the more I'm realizing how old the monitors we use at work are. I think monitors even slightly older have better output and are hopefully not showing these problems to the reader. Also, I checked the same epub in ADE and Readium, and the downsampling in Readium is much smoother. It's a shame that the niceties that people have come to expect from the browsers have not hit all of the ereader platforms. Yet another reason we need to just be able to open the books in the damn browser and call it a day :/
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