Michael N. Marcus, who I mentioned a few days ago  when Amazon subsdiary CreateSpace refused to print his book because it mentioned Amazon (they subsequently called him to apologize  and let him know that was a mistake) has written a post comparing books vs. e-books to craft vs. chain pizza .
The analogy is made on the basis of typographical matters and quality. After painstakingly examining a 318-page book he’s publishing line by line to make sure that word spacing, hyphenation, and so forth look as good as possible on the page, he received a copy of Dan Poynter and Danny O. Snow’s book U-Publish.com 5.0 and was taken aback by how “just plain ugh-lee” the printing in it was.
Unlike Dan P’s classic Self-Publishing Manual, (first published in 1979) the new 2010 book has oversized indents, no hyphens, and the text type is condensed sans serif. Word spacing is atrocious, every page has rivers, and there are orphans which could have been easily eliminated.
Although this is apparently a self-published printed-on-demand paper book rather than an e-book, Marcus says that the willingness of readers to accept the typographical limitations of e-books (most notably the lack of hyphenation) has led to a contamination of these practices into paper books.
Because Marcus really dislikes ugly books, he has been hesitant to release any of his books in those e-book formats he decries even though he knows it may be costing him readers and income. He suspects at some point he may come to accept e-books as a “parallel universe of publishing” rather than a poor substitute for a better-looking print book, just as one of his friends will eat chain pizza when the local Neapolitan craft-baked pizzerias where he lives are closed.
I would just add that Marcus made his observation on a blog—another venue where he has relatively little control over font or word spacing. And there is no hyphenation either save for those that come as part of compound words like “mass-produced”. And it’s also possible that the ugliness of self-published books may have more to do with the lack of the formatting services offered by traditional publishers (though you would think that people who’ve been writing books on self-publishing for 30 years would know how to do it right by now).
Our current e-book formats grew out of another area where there was relatively little typographical control at all: the Palm Pilot. It was enough back then that we could read them at all (given that they were basically shown on a screen not much fancier than a TI graphing calculator’s). Since then, formats have kept that premium on being able to read rather than looking fancy.
And so e-book formats do still leave something to be desired. (Marcus would probably be right at home with a font blog post I covered a while back  about the iPhone’s typographic problems.) But as we’re getting into more graphical formats, with more processing power behind them, perhaps something can be done about this eventually. It seems to me that if a word processor can hyphenate words as they’re being typed based on a built-in hyphenation dictionary, an e-book reader should be able to do so after the fact.
In the mean time, there are at least some options. A few months ago, Jeff Kirvin wrote about ways to configure various iPhone reading applications  so that they look the best and are the most readable on-screen.