This is an interesting development for people who think there is still a market for the printed word.
In my opinion, the rise in the number of people who don't read books does not mean that people are not reading. I think it is more a case where what they read has evolved to the point where the book is an irrelevant item in the lives of many.
Have you ever walked into someone's house and noticed whether or not they have books? An absence of books means one of two things--either they don't read them or they have a robust E-reader or tablet and have no further use for books. I can sympathize with that--I have books that are in Rubbermaid containers precisely because there isn't room for them. Should I chuck them out or should I save them?
The E-reader market has tanked in some ways because of the flood of mediocre material (people trying to cash in) and because the devices are unstable. When you think back about all of the people who are holding Nooks and Sony E-Readers (hey, that's me!), there's almost no solution that looks like an upside. How do you carry around a library full of books on a device that is rendered obsolete in mere months? How many people are going to create a fully digitized library that has to be stored in the cloud or ported around or copied and re-copied? People are more likely to do that with the music they care about. Books, like old albums or songs that are tiresome, fall away.
And, yes, I thought of this as well. Literacy isn't an issue:
Complex, inaccessible, and pretentious literary offerings don't actually kill off readership--they simply turn people away from writers but not the medium itself. Stephen King is widely read because he delivers; being able to deliver isn't the same as being good or bad, but there's no way King could be considered a bad writer.
I don't know if people stop reading so much as they stop trying to engage written forms of entertainment. The human need remains. What fills those needs has evolved and changed with the technology.