I seem to remember predicting the immense rise in ebook sales some years ago - maybe some of the book publishers should have hired me!
The growth will probably level off as sales start to reach a level of consumption that will sustain over a longer period - but p-books will continue to steadily decline over many years. Don't forget there was still a market for luxury bound books for many years after the advent of the paperback (and probably still is).
As for readers, I agree that reading on a larger tablet is uncomfortable, but the smaller 7" tablets are another thing. My Google Nexus 7 is about the same weight as my ereader. The e-ink ereader wins hands down in bright light and for long trips (low battery use is a big advantage!), but I often use the small tablet for reading in bed or in poor light when I am too lazy or tired to get a reading light. The e-ink screen is definitely better on my eyes and this type of reader never suffers from overheating (probably not an issue where you don't get 40degC days a lot!) Roll on colour e-ink tablets!