It's the same reason that all media encumbered by "digital rights management" suck: One little perturbation to the system and you are locked out of what you spent your money on. I have bought several e-books for the Palm, chiefly from fictionwise.com. My new PDA stopped working. I switched back to my old PDA. Now it is impossible for me to read my old books. Some of them I never even finished in the first place. Unlike meatspace books, I can not lend them, sell them, or trade them. The money is gone.
Amazon's Kindle 2 is appealing to me, not because I need an e-Book reader (a PDA with an offline browser is usually quite sufficient). (The ability to convert PDFs into something the device can display seems quite useful though.) As pointed out by xkcd, it's because of its free cellular Internet connection via Sprint EVDO. Apparently, the Kindle's browser is primitive, like that of a smart phone. Therefore I would estimate the value of this service is in the neighborhood of $100 per year (based on equivalent costs for prepaid Internet access). More minuses: the interface is awkward and slow, and the Kindle itself is too big to fit in my pocket, so how often am I going to have it with me?
However, whenever I go on trips, I wish I had something smaller than my laptop that would still give me most of its functionality (web browsing, music playing, presentation editing, paper reading). The Kindle is not yet there, and neither is the iPhone. Maybe next year...
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