1. There is a standard for ebooks that everyone can agree to. (i.e. not the epub/mobi/PDF/Custom Apps, other stuff format wars we have now).
This is mostly the case now. Every modern physical ebook reader (Nook, Kobo, Sony, etc) supports EPUB with the sole exception of Kindle. Either Amazon will eventually bow to standards, or the Kindle will ultimately become irrelevant. Format changes have happened before. Barnes & Noble successfully switch from PDB to EPUB. Amazon could do it, if they wanted to. Right now they're in a market position where they don't need to. Of course they're also very, very careful about always referring to their offering as "Kindle books" and never "ebooks". These are not intended to be generic ebooks readable on any reader. They're Kindle books, only readable on devices with Kindle software.
PDF is evil and needs to die as an ebook format. That's already happening, especially for narrative literature. The remaining hold-outs are technical books and designers stuck in a paper mindset. The former will change as the epub standard evolves. The latter will change simply with time, as the old guard retires or dies and are replaced with people who understand how to layout books digitally (if you want a corollary for this, look at the web -- it's been a very long time since professional web sites have had "Best viewed at 1024x768 in Internet Explorer" recommendations, because the old paper-based designers who wanted pixel-perfect control have retired or died, or finally evovled).
Custom apps are simply money grabs, and will die as generic readers become more widespread.
2. The DRM is gone and/or and things like resale are easily allowed with ebooks.
There's plenty of movement on this front. All of the major stores allow publishers to sell their books without DRM. The old-guard publishers are the ones requiring DRM now, and they will eventually be forced to follow the example of the music industry. It's just a matter of time at thi point.
3. ALL books are available as standard eBooks conforming to the conditions above.
This is probably the biggest hurdle. The Gutenberg project produces high-quality epubs, but they can only handle copyright-free works. So long as there are luddite authors like J.K. Rowling who refuse to make their works available in ebook format, you will never be able to hit 100% coverage. But of course like all things, time will solve this one. In a generation or less, any author will find it unthinkable not to offer ebooks. Assuming they're even able to do so if they wanted.
4. eBook readers are cheap enough that basically everyone has them.
Compared to what? But there are two ways to look at this one:
- Do you have a smartphone? You now have an ebook reader. Every major mobile OS (iOS, Android, BlackBerry, Windows Phone, etc) has at least one ebook reader. Kindle's on every platform, for example. But what if you don't have a smartphone (despite it seeming like everybody and their dog has an iPhone or Android device these days)?
- Dedicated ebook readers can be had for well under $100. Kindles are available for $114, and Nooks for $140. While that sounds like a lot, it's really rather cheap and a one-time fee. How much would you pay for paper copies of the entire Gutenberg library? Several orders of magnitude more than $100, as a low estimate. Unfortunately ebook prices on current titles are not that good (this will have to change over time), but if you read 20 free books that on average would've been $5 for a paper book your reader's paid for itself.
5. The price of eBooks drops to represent their approximately $0 per unit production cost.
I agree, yet disagree. Ebooks still require editing, cover art, layout, marketing, etc. All you really get to save in the production area is physical printing, and when major publishers print paper books they do so in bulk at wholesale prices. That means that per book you might have $2.00 in physical production cost for a $25 hardcover. All the other costs would still apply to ebooks.
That said, ebooks are a different market. There's no short-run hardcover, followed by cheaper trade paperbacks and then even cheaper mass market print runs. You don't need to recoup all of your costs up front, so you could afford to price a book lower than hardcover and still make money. Publishers haven't fully figured this out yet, and with the advent of agency pricing last year I suspect it will be some time before they fully realize that their fundamental business has changed. This, like so much other stuff, will change in time as the old way of doing stuff dies off with the previous generation.
The immediate benefit that ebooks have provided, however, is access to independent authors and books that would not have made the cut with the big publishers. Remember, print runs need to be large to be profitable, so if you have an author that's good but you estimate can only sell 10,000 books and you need 100,000 to make the print run feasible, you're not going to sign them. But with ebooks, there is no print run. Authors can publish independently, working with freelance editors, cover artists, doing layout themselves, etc. There have been many articles on Slashdot and elsewhere of authors hitting it big with $0.99 books and thumbing their noses at traditional publishing houses that rejected them time and time again. But this is also hard work. There are many authors who don't want to do any of that and just want to write. For now, they're sticking with the traditional publishers, but again over time that will change as new media publishers like Smashwords and even Amazon cater to this market of authors.
In short, it's not all doom and gloom. It will get better, it's just going to take some time. The publishing industry today is about where the music industry was a decade ago, fighting tooth and nail against "pirates", not really "getting" the digital distribution model, charging outrageous prices for poorly-made, DRM-laden crap. It took time, but the music industry finally got it, and today you can buy DRM-free high bitrate MP3s (FLAC would be better, but I'll let that slide) from pretty much any store and play them on any device. Come back in a decade and see what happened to the publishing industry and I suspect it'll look about the same as what happened to the music industry.