Computerphile sat down with Professor Steven Bagley of the University of Nottingham, who takes us through the steps involved in auto-formatting a text on an ereader. As Bagley explains, good formatting takes a lot of processing power to run a lot of calculations. Most ereaders are relatively under-powered machines which are really doing the best they can.
But to be fair to current ebook readers, things might be less than ideal now but they used to be worse. The algorithms used to layout text now are significant improvements on ones used a decade or more ago.
What's more, the general quality of ebook design has improved drastically since the Kindle launched; I have ebooks in my Nook library which date from before the Kindle era and are so painful on the eyes as to be unreadable.
Coincidentally, this also explains why there is a solid minority of ebook lovers who insist on user-controlled formatting. Our familiarity with bad formatting has instilled a desire to control the formatting ourselves. And even after the quality of formatting has improved, many of us still want to choose our own formatting options; our personal solutions might not look the best but the personal nature of the formatting decisions adds a degree of emotional investment (everyone loves their own work).