I still mostly read physical books -- in part because I'm in grad school for English Lit, and the edition problems with eBooks makes them hard to cite and harder still to cite authoritatively.
But a doctor I know observed that he and his wife switched to Kindles because now they don't have to take 10 lbs of books with them, per person, when they travel. I definitely identify with that.
The biggest problem as anyone who owns (buys) a lot of books knows is what to do with them once you've read them. E-readers will continue to get better, more convenient and cheaper. My desire to try to sell used books on Amazon, bookstores or donating them to Goodwill or the library (even though libraries don't actually want your donations) will continue to remain low.
On top of all that, used book stores provide much more value than big commercial vendors like B&N because their selection is so broad and so cheap. Used books are in general perfectly fine to be re-read, so people seeking bargains on new books go there frequently; e-Books will generally not be discounted very quickly, there is no such thing as a "used e-Book".
The _real_ reason used bookstores are going to be around for a long time, though, is that there are A LOT of books out there. Even if someone was able to digitize millions of books, there'd be millions and millions more that would only be able to be found in used bookstores, especially with older books. Just go into your local used book store and ask yourself how much of that catalog is available on the Kindle, or will be made available any time in the foreseeable future. It's a pretty small percentage.