[ProDigit]

The only devices I really looked at making ebooks on, where the Kindle Paperwhite, Kobo H2O, Sony PRS-505, and Jetbook Color.
All of them allow some basic change of fonts, sizes, line spacing, and in some cases margin sizes, and paragraph spacing.

In case of JSWolf's last example, is a good reason to use CSS, using multi font types in one document, ...

But many books only use one font. Especially older books (those in public domain), with only variations either bold or italic text, which can easily be done in HTML.

line indent, I wonder... It's way easier to use a space in the HTML document, or worst case, use ' ' before each line that needs indenting.
So it is possible in HTML, but for longer texts, it might indeed be better to use it in the CSS.

For encyclopedias, dictionaries, and bibles, line indenting actually is better written in HTML, since it's not using long paragraphs, but multiple very short ones.
Encoding multiple smaller paragraphs to use CSS might end up making your document a lot larger, than just using a space, or ' ' before each line.

  is supposed to be a non-breaking space, but the fact that the ' ' always comes after a \r\n (enter), means it'll never be broken up, unless in the highly unlikely event that the first word is larger than your display width, or font sizes are large (eg: 24pt or more).