You’re slightly in error that it only reads its own PDB format. It actually reads its own (pre-formatted) PDB format, and the PalmDoc (unformatted ASCII text) format that was in popular use back in the PalmPilot days. But almost nobody uses the latter anymore.

It’s not really that hard anymore to create eReader-formatted books. There are macros for both Word and OpenOffice that make it easy. I’ve done a number of conversions myself, in fact.

There are a lot of good things about the eReader format, most notably that its HTML-style markup is easy to understand. If I want to make a table of contents, all I have to do is mark the chapters and it assembles them automatically. (Compare this to Mobipocket, where to this day I still don’t know how to make a working table of contents. It’s all so obfuscated, there’s no figuring it out.)

Even so, the eReader folks have recognized that the format needs an upgrade, and sometime this year they will complete adding the ability to read ePubs in an eReader DRM wrapper (and, presumably, plain-vanilla ePubs too) to every one of their eReader apps. (When you consider how many different platforms they support, that’s quite an accomplishment.)

Also, you don’t have to use the eReader/Fictionwise bookshelves. You can run a webserver on your own computer and point the program at that instead if you like. Even so, for someone used to having to download to desktop then sync, being able to download (and even to buy!) an e-book from anywhere I can get a wireless signal is pretty darned neat.

(If you want to blame someone for the whole overcomplicated business of using the iPhone app to pull the book down rather than syncing it with a desktop client, blame Apple’s refusal to let anything but music, movies, and apps move over the USB conduit. Thus, every app that depends on external content has to find its own separate way of putting it on, and it ends up being a big fat mutually-incompatible mess.)