obviously, people were willing to settle for the electronic books without the physical.
May not even be a case of settling.
I wrote a novel aimed at a small student community, and released the ebook for free. i wanted it to be a gift, so i made the ebook free (creative commons) and also gave away a lot of physical copies to the people i thought would appreciate them most (within a certain community).
the really interesting thing is that i got feedback (remember, from people who i was offering the book to for free) that they were really happy to have the ebook version, but they didn't want the physical book version becase it was 'stuff' that they didn't need. they're students, they move around a lot, books aren't that light, plus they don't really have a place they keep 'things' any more, now they've moved out of home, and probably won't for a few years to come.
now sure, they might not have been interested at all, and been letting me down gently, but it made me realise that there'd need to be more to any future business model i might come up with than 'electronic is free, physical is not'. i know this may seem obvious in retrospect, but i think there's still an assumption held by many people that physical copy = upgrade of electronic copy, and this may not be true.
i'm sure many people on slashdot feel that way already, but mostly i would expect for functional/practical reasons. however, my experience suggests that the sentimental value of a physical book may no longer exceed the value of the ebook, either.
that could be the seeds of an interesting change in our perception of books altogether.