I think it depends.
Some people will always love the printed version.
There is nothing like smelling brand new pages, and flicking through an unread book.
And libraries full of books are some people's obssession.
Therefore, paper might become the minority as they'll sell us the idea that we're saving trees, etc.
So reading won't stop, what will change is the format how we do it.
It's the same thing that happened with mobile phones.
Landlines still exist, phone calls are still being made, the only thing that changed is how we make them.
I don't think ebooks will ever completely replace paperbacks. While I love downloading shorter stories on my Kindle while on the go, when it comes to massive epic novels, or other heavy-weights, nothing beats the feel of the book in my hands. Completely Irreplaceable.. but then again, I'm really, really old school LOL
I wish they still sold some books in scroll format. I'm picturing myself sitting on the metro reading one just to see how random people would react. It would be a lot of fun.
I don't agree with those who say that the "feel" of a book is what will make the difference. After all, the books we buy at the store are NOT the nice, cloth bound/leather bound books with excellent printing and prestige format pages.
No, these books fall apart and the pages get yellow before I get to my home from the store.
I do agree though that eBooks are just another method for delivering a product. They are not intended to be instead of paper books, but an addition to them.
I do believe it will happen. The cost of manufacturing a physical book will become simply too much for a publishing business that is wrestling with technology that is changing much more rapidly than the old paradigm.
There's a page 1 article in the NY Times today supporting my theory that e-books are mostly eating into the sales of mass market paperbacks. Hardcovers and trade paperbacks aren't going anywhere, but mass market is diminishing fast.