High school textbooks will remain in book form for a very long time. It’s cheaper, especially since books are often reused for several years. Buying an e-book reader can be a big financial burden for a lot of students, too.
It may be different in college, but I suspect that real books will be around for a very long time.
Text books is a huge cash cow. If they do elimate physical books it will be to save the publishers money, the savings will not be passed to the users. Students will still be spending upwards of $100 per book except that they will only get them a single download rather than a physical book.
I’ve never heard of a digital textbook program in a public school that didn’t provide whatever device they’re using. Like books, schools give you the first one; if you lose it you usually pay to replace it, though.
As to what’s cheaper – that’s not a given. Paper textbooks are definitely not cheap. A brand new “basal” textbook for high school might cost $50-200 – generally the higher end of that for math, science, and literature, which make for very complex and very long books. (By complex, I don’t mean just the material itself; a basal text usually has the main text plus several indexes and sidebars and special features and cross-references galore and a dozen or so appendices and a bibliography and Og knows what all extra in the Teacher’s Edition, with instructions on how to teach every lesson plus an answer key plus tips on inspiring students and I could go on.) And, even in subjects whose content doesn’t seem to change much from year to year, state and local politics influence what is considered appropriate, and therefore changes often. In good budget years, newly published writing and literature textbooks are considered necessary at least every five years, though since the recession of the last few years that’s changed. Then there’s proliferating and always-changing state content standards (hopefully to be tamed by the Common Core Standards, but we’ll see) and how this relates to state testing programs . . .
On the other hand, digital devices aren’t a straight swap for paper books for some of the reasons I mentioned earlier. Software goes bad – you just can’t use software designed for obsolete platforms or devices – and you’re going to need some kind of expert help to troubleshoot, all of which means money.
No, they’re not a huge cash cow. I am not aware of any major textbook publisher or textbook program that makes even double-digit profit percentages. You can argue that that’s because textbook publishers are inefficient or whatever, but they’re still not raking in much dough.
To be honest, if you’re going to give a Kindle (or a laptop) to my rambunctious 9 year-old, the damned thing better be built to military specs, able to withstand the following:
Etc, etc, etc. 
I voted for under 2, since it has already started. Full adoption will take “awhile.”
With the cheaper Kindle, it helps on the price. Add in the fact that in many of the Social Sciences the text is less than half of the class content (the Prof’s powerpoint and the course pack covering the rest), and you get a situation where an e-Reader is more useful.
I would LOVE for my high school son to use an e-Reader instead of the 7 heavy textbooks that he has.