[DawnFalcon]

No, someone who is familiar with XHTML is not necessarily immediately going to know the details of creating a TeX book*. Not to a professional standard. There are training costs, and there are the delays this causes. And then you have to remember that this is only for a limited subset of ebooks, and the question of value immediately arrises.

(How is knowing XHTML going to tell you what, for example, /badness does?)

Sure, TeX has the tags for footers and such. Where are the tags for dictionary referencing (and not), for dynamic content, for pop-up text, for moving to a pre-set bookmark? All these things have been discussed as possibles for ePuB, and I don't see them being discussed for TeX. You want to freeze ebooks into having the same content as a printed book, which I simply don't.

TeX is not a standard, and if you don't understand the legal problems (you cannot have conditional "public domain". There has to be a proper liscence, and there isn't!), then I'm sorry, but they do exist and they will cause problems. Intentions count for nothing, what matters are the actual legal practicalities.

Your motive? To freeze ebooks into pbook's feature set, if you're aware of it or not. That's what being limited to a general TeX renderer* means. Again, if there was an effort to clean up the legal problems of having the renderer on the device, and to create a proper subset for ebooks then perhaps I'd feel differently, but as this stand that's what using TeX means for ebooks.

(*Although what you actually probably mean is a DVI driver, no?)

It's not coincidence that PDF is the standard output from TeX.

Edit: Oh, and don't forget that in the short term you have to deal with DRM. I don't believe TeX supports DRM natively, so it would need another custom DRM format layered on top of it...