I've loved following them over the years. They were one of the first "startups" I read about (in the Boston Globe) as a kid growing up outside Boston in the 90's.
It seems like it's been an incredible uphill battle to make the tech work. I love my Kindle screen and do hope that someday passive color screens can rival light emitting ones.
Other than E-readers, the big application has been retail price signs.[1] With a passive display, they can be battery powered and have a long battery life. They only need to wake up and rewrite when the price changes. (Most of the ads for these displays show something like "30% off!")
Perhaps not as good as a glossy full-color textbook, but a few days ago I bought a paperback and I was surprised how much I wanted to read it on my Kindle instead. Paperbacks often have terrible resolution, and the contrast isn't much better (paperbacks often have ivory-ish colored paper).
You're right about contrast. For normal reading this can be compensated with setting the font (a lot) bigger. This makes reading a lot easier on the eye. The only problem is that PDFs and tables or bullet lists get messed up. Speed and CPU power then can become a problem.
I worked on one of the fairly early E Ink use-cases in '96 for a really interesting summer job, as part of a DARPA-funded project. Wrote a graphics driver for it in assembly; learned how to use an oscilloscope to debug.