I've been waiting since the iPad announcement for someone to loudly proclaim that the iPad is a Kindle killer. TechCrunch managed to find one fool who took that position. You might want to go read his argument before I explain why he's wrong.
The answer is pretty simple, and most people have already figured it out. The iPad will not kill off dedicated ebook readers becuase it does not compete with them for the same market niche. There are 4 reasons why that is so: weight, cost, size, and ability. It weighs twice as much, costs twice as much, and and is twice the size of the Amazon Kindle. Furthermore, the epaper based readers do one thing, and they do it really well: they let you read. As great as the iPad is (I want one), it can not duplicate the reading experience of the Kindle, Nook, or Sony Reader.
I've watched the Stevenote, and I'm not that impressed with iBooks. Steve demoed only a very limited number of features which did not include: dictionary lookup, highlighting, annotation, web search (from inside the book), word search, bookmarks, or the ability to change font & background colors, justification, or margins. Until I know it has most of those abilities, the iPad is a distinctly second rate ebook reader.
BTW, I now understand why Amazon bought Stanza last year. They did it to block Apple. Stanza is by far the best reader app on the iPhone. It boggles the mind that Apple didn't acquire Stanza. Surely the iPad was under development way back then. Surely an ebook reader had been planned.