While there is poverty and third world countries, no, it cannot replace it completely. I believe it will catch on the the techie types, those who must have the newest electronic device. Somehow, though, I can't imagine spending a rainy day curled up with a cup of tea and a reading device. There is a certain comfort level to holding a book in your hand. Besides, what would we do without bookstores.
People enjoy browsing.
I really don't think so. I love seeing them on my shelves at home, beside my bed, and just generally lying around my house. I can't imagine life without them. As Asimov put it, the ultimate handheld reading equipment will be small, lightweight, require no energy to operate, be self-contained, need no batteries, be activated solely by thought and be able to scan forwards or backwards nearly instantaneously by eye movement, without any need for manual controls. I'll never switch.