I think he's just saying that people (especially college students) aren't going to pay close to $500 for something that is ONLY a reader if Apple comes out with some tablet device that can display their text books, but also be a full featured web browser, play movies, have iPhone like apps etc. etc.
And I'd agree. In the mainstream I don't think dedicated readers will ever catch on. They'll stick around and sell to avid readers, but they just dont' appeal to the average joe who maybe reads a handful of books a year.
So I think tablets will be the next big thing in the mainstream tech gadget market. People will have them like they have laptops today, and use them internet, videos, facebook and all kinds of stuff and maybe also buy the occasional book on them. Students will have them for their textbooks and all the other stuff.
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