If you had a tablet with a Kindle-like screen upon which you could edit via gesture, would you prefer it over paper?
I'm a mathematician: I do a lot of work on paper, and I don't see that changing anytime soon.
That's not to mention e-books as sources. Even if we figure out the virtual library issues (lest we bankrupt every grad student -- comprehensives in the social sciences can encompass 200 books!) we still have to look at workflow. Should the grad student have 4 kindles all synced, every e-book markable with programmable gestures both robust and simple enough to compete with paper?