Personally, I also believe that there's only one reason why the paper book isn't far less popular than it is, and it's entirely temporary.
Get out of the tech-minded echo chamber and ask a person why they would still buy a paper book when they could buy an e-book, and they'll pretty much only respond with "paper books just feel right to me".
The problem is completely unrelated to pricing. Since the beginning of time, people have comfortably navigated the sliding price structure of books. Some people want to buy the next Hunger Games on day 1, and they pay $39.99 to buy the hardcover and find out what happens to Katniss. Some people wait until the hype dies down. Some people borrow from a friend, and yes, some people still go to the library. And those exact same rules apply to e-books.
The entire conversation just reeks of idiocy and a bunch of industry coalitions blindly grasping around for places to point fingers because they apparently are overlooking the simple thing that everybody constantly says. I've already said it, but I'll say it again:
"Paper books just feel right to me."
Steve Jobs had a beautiful intuition about peoples' relationships with technology. It was a skill that's so painfully rare that he's still known as basically the only guy capable of figuring out what would make an advanced piece of technology attractive to an average person. Sadly, he was completely wrong about the iPad being an acceptable replacement for a book, and I feel like many people are continuing to follow him down the wrong path.
This has nothing to do with distribution and pricing. It has nothing to do with the cost of manufacturing an e-book being far less than a paper book. People still pay tons of money for games on Steam.
The single problem is that e-readers aren't good. They're garbage. That's it. Amazon is the clear leader, but it's not good enough. For anyone who wants to dominate the e-reader industry, here's your free advice:
1. Make an e-reader with a beautiful e-paper screen capable of displaying full color.
2. Make the screen refresh very quickly
3. Give it sensible touch gestures that you never accidentally trigger, and give it very useful physical buttons.
4. Make sure it can do everything a book can do. Can you quickly thumb through a 500 page novel on a kindle? Nope. Can you easily write something in the margin? Nope. Can you bookmark your current reading position, and also earmark a few other favorite spots in the book? Nope.
5. Give it a non-tech appearance. Make the damn thing out of wood.
6. Sell it in 3 sizes from day 1: The current standard paperback-ish size, as well as a smaller smartphone-sized one, and finally a large one, like ~15 inches.
Aside from the challenges of building a better color e-paper screen with great refresh, the others are just so obvious and so stupidly ignored. I'm actually frustrated just writing this. Make the e-reader personal, make it a lovable object. People will not stop throwing their money at this.