Just as digital music (arguably) has not hurt record sales, it has (again arguably) had its toll on bricks and mortar music stores. It is a way of life, and love it or hate it, it is inevitable.
I hear you, but that doesn't apply to all the books I own. If I could swap at no cost to me all my physical books with idealised e-books (say on a 100% faithful reproduction DRM-free e-reader), I would probably only keep physical copies of 10% of my hoard.
A paperback is lightweight, cheap, durable and independent of other resources. Most importantly, a book as an experience is a long, drawn out affair. Books take hours to enjoy, so it's of little importance how many I can carry at a time.
Music/movies have the opposite effect ~ they are shorter durations of entertainment, so the more I can carry, the more I can enjoy the experience. The major advantage of digital music is that I can carry my whole library with me in my pocket. Even if I could do this with my bookcase, there is little reason for me to do so. This defeats one of the major advantages of kindle.
I don't disagree with anything you say, but I don't think the death of the book will happen any time in our lifetime, or our children's lifetime to be honest.