> they can't get to the next level of scale because they can't solve yield issues and they can't solve those because they can't get higher volumes
I really doubt that theory, either. This world has just way too much money completely idle waiting. It would be extremely easy for them to get really big money if they really had anything that would be world-changing.
The problem is that, once you really look into it, there is absolutely nothing in eInk that is world changing.
Consumers have problems distinguishing the supposedly better contrast from cheap reflective+monochrome LCD displays (like the Pebble or stuff sold in amazon for $10 these days). But they can easily recognize it the moment the slow refresh comes in. So your average customer only sees disadvantages and high price. They will choose reflective LCD any day over pure eInk. And thus all use cases where eInk might have succeeded are perfectly covered with plain old reflective LCDs (e.g. week-long battery life, primarily outside use such as smartwatches).
So your only other benefit about eInk is the passive power usage when not refreshing. Which is why they are making some in-roads into this type of market, e.g. sales price tags, signs, etc.
But consumer market? There is just no interest whatsoever from consumers. None whatsoever. Only a handful of geeks know what benefits eInk brings over reflective LCDs (angles, polarity), and out of them only a handful care enough about them to buy.