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Many many millions of people have bought Nintendo DS consoles, both for their children and for themselves. These cost a similar amount to an e-reader. In my view, some usability improvements, slick marketing, and focussed content (e.g. [in UK terms] material for children aligned to key stages) would make reader devices suddenly take off.
Advertising that said "simply install adobe, register your reader, install some freeware that's better than the bundled software, download a book at more than the paper price, install python, some extras, learn a little programming, find where we hid your download, copy to the reader - and away you go!" is unlikely to work.
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