My wife bought me an e-book reader two or three years ago because our house is bursting with paper books that I can't stand to part with. I love it. I've only read two or three paper books since then. If it broke I'd buy a new one as soon as I could. The truth is that when you're reading even a halfway decent book, it sweeps you away from your surroundings and you hardly notice the medium you're reading on. It's lightweight, fits comfortably in my hand, and carries all the books I want.
I WILL say that the current generation of e-book readers are great for linear reading like novels, but not so great for skipping around like in textbooks, instruction manuals, etc. It's not that it can't be done, but you can't flip through pages as quickly as you can with paper. You can use digital bookmarks, but it's just a little more cumbersome. That will change over time. We're still only on the 3rd generation of modern e-book readers. By comparison, it wasn't until the 5th generation of the iPod that MP3 players really broke out of their niche audience.