The JPay JPlayer, mentioned and linked elsewhere in this thread, is a cheap ($50) portable device with what appears to be a roughly phone-sized display, 8GB of internal memory, and approval from the US Department of Corrections. It is already being issued in prisons as an MP3 player, for music sold at JPay-owned kiosks installed in prison commissaries, and as a tool for reading email and composing replies which can be sent during kiosk sessions at a cost dependent on the length of the message. Adding to this device the capability to read ebooks, and to the kiosks the ability to sell them, seems like it shouldn't be much of a stretch; reading might be more pleasant on a larger screen than the JPlayer seems to provide, but I suppose prisoners can't be choosers, either.