Paper or digital?

Trying to figure out what the heart of the debate about e-readers is a little difficult. I just read a short bit about a new e-reader, the iRex Digital Reader 1000, being released on Monday that got me thinking about whether it was time I bought into the technology. Reading the comment stream of the article pretty much captured all my internal conflicts on the subject. I like having a bunch of text at my fingertips, but I like the feeling of a book in my hands. I like the idea of having less clutter of books around the house, but I like to see them there on my bookshelf. I like the idea of digital media being cheaper, but I doubt that I read enough for the cost difference of the material to offset the cost of the hardware. I'm not sure if I'm part of the book retailers mass market, but I think I've figured out features that would reach the tipping point for consumers like myself.

1. Pricing. There has to be a price advantage. There's no getting around it. I buy about 2 books a month. The price of a top notch e-reader is about $650. I would have to save about $18 a month buying the digital form of a book for 3 years to make back the price of the e-reader. Unfortunatly a lot of ebooks I've seen are selling around the cost or even more then the printed edition. Even the music industry gives a better deal then that. The Kindle books through Amazon sometimes gives you a few dollars savings, but it doesn't really add up for me. A possible value may come from something other then book purchasing. For example, although I only buy a couple books a month I have about 50 in the queue. If there was some kind of model where I could "rent" a book for a week for a few dollars that would be good or if they used a subscription plan like Netflix for digital books that might even be better.
2. Convenience. The ability to browse through books and purchase them from anywhere almost pulled me into buying a Kindle. I'm one of the most impatient people in the world so I like the idea of getting the books I want right now and reading them from wherever I am. Beyond the purchasing convience I think they could also add other things that would make my life a bit simpler. For example, since most e-readers use E Ink they can be read in direct sunlight. I would hope they would take advantage of that and put a solar charger on it somewhere. If that feature were there I think I would have to get one just in case I got stranded on a deserted island somewhere.
3. Compatablility. All things text. Okay music and video would be cool, but it needs to be able to display all things text. I don't want something that can display anything but PDFs, that's just silly. There are about 75% (maybe) of the books I want in digital form, but that's not enough. There also needs to be all the magazines I can think of. Magazines usually contain about 10% useful information, but we hang on to them for years. To me that's a perfect thing to have digitally archived.
4. More Awesomeness. The expensive features pedicted on the iRex are almost a necessity for me (except for the bluetooth, I've never really figured out what that's for). I think that they have the right idea about the touchscreen and the stylus. I hate having to print out technical journal articles just so I can mark them up and then lose the article in a big stack of others. I would also want my markup and notes to be archived, searchable and shareable. I want to be able to to search all the text in all types of documents. I know it's a lot to ask, but I want it to have a deep amount of customization that's very easy to setup.

If all the above features were there I think I could justify buying a e-reader. I would use it for all the magazines, pop fiction, scientific papers and time sensitive technical books. The books would get in paper form would be books I would like as a perminent part of my reference library like Thinkertoys or fiction I really enjoyed like The Great Gatsby. Until then I guess I'll need to make room in the house for another bookshelf.