I think you definitely need a tablet for this purpose. I went into the e-reader market looking for something to help me work with pdfs, but then realised e-ink devices won't give me the functionality I needed. Reflowing etc was very unpredictable for me, and the annotation offered by e-readers just doesn't compare to tablet based alternatives.
I use an iPad in conjunction with Dropbox, and use annotation apps such as iAnnotate and PDF Expert. They work brilliant for my purpose. Like the poster above said, if you care about extra storage then I guess an Android based tablet is the way forward for you.
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