Actually, I've been thinking about this problem on and off and to me it seems like the whole concept of WYSWYG editors is flawed. Instead I've been thinking about a side-by-side editor.
The editor will allow you to edit txt files in a simple lightweight markup language like rest or markdown (it will have GUI controls to make it easy, rather like the editor we use to make posts to mobileread). As you make changes the result will be automatically updated and displayed in a pane to the side of the editor pane.
So editing books will be about as hard as making posts on mobileread.
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