IMO, the only way for physical books to exists alongside ebooks is by bundling the ebook with the physical book, similar to movies. It baffles me why publishers haven't already done this, but then again...publishers aren't the brightest people.
ebook: $31.99
print + ebook: $32.99
print: $29.99
> print: $29.99
The fact the ebook costs more than the print book is just laughable. It reminds me of Ticketmaster's "delivery fee" that they charge when you print tickets at home.
Plus, think of the lock-in that the stores are missing out on. As a Kindle owner, if Amazon offered me bundles, I would probably never buy another book at Barnes & Noble.