I never had to adjust to reading on a smaller screen, because my ereading affair started on a PDA in 2003. Far lower resolution and even a little smaller than the phone I have now. I look forward to someday having a nice media tablet too, but the specs still aren't quite right.
In the meantime, cell phones are a highly underrated reading device. My Touch Pro2 is the last thing I use at night (I eread to tire my eyes to help me fall asleep quicker, I also use the mp3 player on a sleep timer to provide white noise) and the first thing I use in the morning (G-Alarm, a program that not only lets me set up tons of alarms I need to rouse me, but also lets me tie snooze to math problems of varying levels of difficulty).
One way eink fails is for night reading. For years, I messed with booklights and batteries and bulbs and their attending bulk. One reason I've preferred ereading since trying it is avoiding all of that. There's one sidelit eink device, but the reviews weren't happy with it. Other ways eink fails is for cost and flexibility.
I always have my cell phone with me, so I always have my book collection with me too. If I were carrying around something larger like kindle or nook, I'd leave it behind regularly. Even when I do get a good media tablet (LCD, not eink), I don't plan to carry it with me (a kindle + iphone is a great combo since they sync pages). It'll mainly be a home reader and my cell will still be my goto mobile device. Life is full of lines and waiting rooms, and I don't like to end up in one without a nice book selection.
As to lower end phones, if you are referring to dumbphones, I doubt I would enjoy reading on many of those. Even though I'm happy with a 3.6" screen, I do have a lower limit. I wouldn't read on my old razr unless it were an emergency. For pleasure reading, I want high resolution, and I want decent reading applications.
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