. . . isn't the technology but the people in suits. They really need two things to make e-readers work.
1) Open standards. Investing in a given proprietary format is risky to the consumer. What if future devices won't support current formats? When my reader breaks and I want to buy a new one from a different manufacturer, how can I move my library? Self-publishing? Open standards addresses all this. I will not buy one until I can really own my e-books.
2) Aggregation with value added service. A virtual news stand where you can pick out magazines and newspapers cafeteria style with different levels of subscription. For example, the basic would be two monthly magazine and one daily paper. The next level would be three magazines, two daily papers and an annual. I could pick out a variety of publications but only have to pay one bill.
For an example of a value added service, consider a magazine like Time or a newspaper such as the New York Times making their archives available online to subscribers. Under this model there are definite advantages to subscription. I'd have the entire "paper" and the archives (or other value added service) rather than an abbreviated online version. I'd have it all on a device that I can take into my living room and stretch out on the couch and enjoy my coffee.
Just my two cents.