The 505 does indeed support epub. I just got finished reading a very good novel (Ashton-Kirk Investigator, from right here on MobileRead) in epub format. You may need to apply the firmware patch if it's an older 505; I got mine post-upgrade, so it came with epub support.
There's a fair segment of the market which agrees with me about the 505: it's the best reader Sony has made. The 300 is too small, the 900 is too big, and the 600 has that damnable touchscreen, which (aside from its effects on clarity) just doesn't work for people with corrosive skin or a bad Cheetos habit. Since Sony, being Sony, has ignored our demands for a 510 and concentrated on selling ebook readers that we don't want to buy -- has tried to force us to buy them by discontinuing the one we
do want to buy -- the prices on the secondary market remain fairly high.
Sure, it's discontinued. Then again, so am I.
I'm a one-off model, and the manufacturing facilities were shut down years ago. Hopefully that doesn't make me worth any less! Given the dubious quality of Sony warranty support, being out of warranty isn't really that big of a deal. If a device works the way you like, and does the job you need done, whether or not the company is currently pumping them out of the production line shouldn't be a major factor. They don't make
these anymore, either, but that doesn't mean I don't lust after one at a level which probably imperils my immortal soul.
That said, if a 505 has been here in the Flea Market long enough to negotiate about the price, instead of selling within hours, yeah, it can probably come down some.