For philosophical reasons: genius is about annotating text, and as a result, about close reading. We'd rather optimize for a close read than a speed read.
Moreover you actually break selection pretty badly along with it. There are other ways to annotate than to pop crap up every time a user highlights text.
I'm in no mood of solving UX problems for a website that has gotten me so disgusted within seconds of opening it. And no, this is not an exaggeration. Imagine if, while reading the newspaper, every few seconds some really annoying guy moved it out of the way and yelled "DID YOU SEE THE SPORTS SECTION?" or similar crap you don't care about. This is the most direct analogy I can find to explain the situation to someone who doesn't highlight-read.
Would this bother you as much if the "Annotate" pop-up was off in the margin?
Would it be possible to move the button just to the right of the highlighted block? Then speed-readers don't get hindered, and the annotate functionality remains usable.
DO NOT fuck with basic functionality.
[edit: Come to think of it, I'd love to see three modes: the current highlight, none, and footnotes (which one might hoover/click). Whenever I read annotated texts, I rarely care about all annotations -- I only look up the things I need to look up. And the highlights are really annoying when reading a text.]