Downtown Seattle has pushed about as far North as it can, and is starting to expand South (past the government and banking towers) as well. Most of these shops are just going to shuffle into new spaces or be replaced by other little shops in new spaces. It's unfortunate, because the neighborhood is old, but there's limits to how much poorly developed land we can hold in the core of downtown. I expect everything from downtown to the stadiums is going to become towers just like SLU did -- because the core of the city needs the space. We'll probably keep a touristy section along the water (just like now) and the core of Pioneer Square, Smith Tower itself, etc. But these kinds of small shops need to move or find a business model that fits with the new density.
I might feel differently if it were a park than a bookshop -- but I don't really feel that bad that a small, niche store got pushed out of the core of downtown so the property could develop.
What makes them different than this place? I've never been to the store in the article. Maybe its because they're still trying to sell new books, and the thriving stores are all selling used books?
So many people I know (anecdotal, for sure) seem to still prefer to read physical books. Even younger people, in their early 20s. Beyond that, some people will still want to collect the physical representation of something they really love.
Certainly, this will not be as many people as before ebooks were around. Still, there has to be more to the story with this one store. It doesn't seem to add up.