"Virtual book" is probably not a good term. I think it carries over from some other error message in calibre.
For Kobo ereaders it is referring to kepubs that have been downloaded from the Kobo server. The KoboTouch driver does not allow these books to be copied from the device to the library. This was done because calibre does not have much support for kepubs, so adding them to the library is pointless. And if the kepub has DRM, it is even less useful. Plus, nearly all the kepubs books can be downloaded as epubs from you library in the Kobo store. I think this is a better source for the books than the kepubs on the device.
Having said that, I might have to revisit this. There are plugins to do most of the support for kepubs, so copying them from the device isn't as pointless as it used to be. But, the DRM will still prevent these from being useful.
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