I have a tablet PC(Lenovo) which is near perfect for ebook reading. Why?
1) I can have Kindle for PC on it. 2) I can have Nook for PC on it. 3) I can read any PDF well 4) I can read all sorts of comics well. 5) I can continue reading on my iPhone (don't have an iPad but if I did then Kindle works great on that, too)
What it won't do well: 1) Battery life isn't as great but it's no trouble being plugged in when needed most times. 2) Can't get iBooks on PC and there are some titles that are iBooks exclusives.
And finally, what none of these do well and why paperbacks won't be squashed: 1) You can't take them to the beach or anywhere sand/grit/or water may get them.
So if you really, really, really want an ebook reader (which we're talking hardware alone) then go for the one that gives you the most freedom, a regular PC (ideally a tablet).
Asus makes a small 10.1" and a 8.9" one that is around $400 and is far better than an iPad and far more useful than a standalone ebook reader.