i wouldn't be surprised if many people don't read on their cellphones mainly because they have no idea they could, or where / how to get books. - zelda_pinwheel
I agree with zelda_pinwheel's observation, I also think that most people wouldn't know how to get ebooks onto their non-smartphone phone. Downloading ebooks onto the phone would require a data plan and not everyone has that. Also, not everyone knows how to transfer an ebook from their PC to their phone.
I used to enjoy reading java midlet ebooks on my Sony Ericsson P1i (Now, I have an Android HTC Legend with Aldiko as my ebook reader). You can easily get ebooks in midlet format from
http://www.booksinmyphone.com and
http://www.mobilebooklet.com (which I created). But after a year of running the mobile booklet site, I find that ebooks on non-smartphones has a very niche audience.