Amazon already has a partnership with Borders. Why not have Borders install Espresso Book Machines?
On-demand publishing at a bookstore/music store/cafe? Just imagine some dreamy-eyed teenager, who writes bad poetry (oh noetry) all day and can make a book out of it in the evening! And publishing your work is an even better conversation starter than a dog.
Do we really have to go through the same mess as with music once again? Hopefully not - in any case, the outcome will most likely be the same... ("We were wrong, we should not have treated our customers like dirt etc...").
I would really like to create the iTunes equivalent for books...
Look at the Sony reader sometime. I remember seeing a single letter on a breadboard E-ink display years ago, and since then I've wanted a reader with that surface. It seems like everyone that handles one wants it. The ideal is an entire library of books in your back pocket, that 'feels/reads' like a regular book. It is getting closer, but the Kindle does seem like a baby step back from the Sony reader.
I saw a Sony reader on the Subway the other day. I had to do a double take -- at a 5ft distance, it looks _exactly_ like paper. I didn't get a chance for a closer look, unfortunately.