I'm a little surprised that this took so long. Amazon has got the e-book market tied up and I'm surprised that any other e-book readers still exist. After almost ten years, Sony has finally given up.
Sony started out on the wrong foot by selling the readers at full price. The proven model for printers, razor blades, and even game consoles, of selling the device cheaply and making it up on selling content was probably more appropriate. They never gained any traction in the market.
More customers leads to more books in the store. More books leads to more customers. It's a virtuous circle as long as the devices are sold cheaply.
There is no real problem with buying physical books from any store out there. However, when buying an e-book reader there is a very real possibility that shiny technology will become a useless hunk of plastic if the supplier goes out of business. It happened with Microsoft "Plays for Sure", and could easily happen with the Nook or any other reader.
The security of going with the largest player in that market means that any competitor to Amazon will always struggle.
This is becoming a very real problem with technology: high barrier to entry and vendor lock-in. How does anyone compete with Amazon or Apple or Google without spending billions and billions of dollars?