Hi there, I am in the market for exactly the same kind of device. I am tearing through trees (and money) printing academic papers.
If only I was a well funded entrepreneur, I would build the following A-paper reader.
A4 and A5 models
Have an interface to JSTOR, etc
Could actually highlight text and then copy that text verbatim and upload to my mac (or evernote

Also create a proper citation (Harvard, MLA, or whatever) and a bibliography at the same time...
If I haven't already gotten a bit far ahead of myself, but if it dominated this niche market, I would want a system that could learn about other highlighted text from other readers of the same paper and then give you only the option of reading parts that other people had highlighted - that would be the ultimate time saver! - hmmm maybe I should patent that...