Ad-Supported Kindle - Why stop there?
In theory, the nice thing about e-books is that you can build a huge library in a portable package. But if each e-book costs about the same as its dead-tree counterpart, then you’re really just paying an extra $114 for the convenience. It’s no more conducive to building up a library in terms of cost, just space.
Newman also makes a really good point regarding well-placed ads inside e-books to bring down the cost. It would also allow the publishers to keep the current model of pricing without ads but reach audiences that want to save money with a secondary pricing model.