It's a great netbook, possibly does enough to replace laptop for some people, but I don't feel it competes with eInk readers. I bought my Cybook to be able to read without eye strain, and it works. Why would I read on screen that would give me headache in an hour?
Anyway, some thoughts:
1) Tech specs say: processor - 1GHz Apple A4 custom-designed, high-performance, low-power
system-on-a-chip. I read somewehre that Apple bought a company making such processors a year ago. That might be quite hard to hack...
2) Since Apple controls all apps on App Store, it can make sure that only books bought at iBooks will work on the device, with an iDRM
It can still be ePub, just not compatible with anything else. It can also make sure that all ePub reader apps are unavailable for iPad.
EDIT:
3) Tech specs also say clearly:
Up to 10 hours of surfing the web on Wi-Fi, watching video, or listening to music So if the screen doesn't eat up all the power, it might be possible to get more of reading books.
and if it's possible to turn the backlight off and still be able to read, it might be easier on the eyes...