I'm a technologist, a programmer, but I specialize in PostScript, PDF, and document automation, and have a detailed knowledge of typography. PostScript and PDF don't replace or automate typography. They allow layout artists and professional typographers to use computer tools to practice their profession.
Hyphenation is only one aspect of typography that resists automation. Proper leading and kerning, white space utilization, even justification, benefit from the human touch. There are algorithms and formulas for all of the above, but none are perfect.
In fact, poor typography is my major complaint with ebook technology. So much so that, though it might be sacrilegious to admit this here, I've reverted to buying printed books again. Not 100% - I still love and use my Reader, but with each potential book purchase, I ask myself if it might be a book I re-read from time to time, and if so, I lean toward buying a printed version.
That said, I don't think PDF is viable as an ebook format. The very things that allow accurate reproduction of the printed version work against automatic reflow (pagination, custom fonts, and font sizes).
The sad truth though is that quality doesn't matter. We've already seen this in the graphic arts industry. Time was that print buyers would come in with loupes and color swatches and meticulously examine proofs for quality. Today, with digital presses, good enough is good enough. I think quality typography will go the way of quality color reproduction - it will become a niche skill reserved for artistic and luxury markets. Everyone else will be satisfied with "good enough".
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