You should read the whole post, but I wanted to pull one quote out and think it over.
On the one hand, JA is right here. There will be fewer books printed. That will result in fewer books sold through bookstores.
However while that may well result in fewer bookstores the surviving stores will do better.
Follow the logic through:
1) Ebooks claim a greater share of book sales
2) Print runs drop (for most books) to accomodate this
3) Gross physical book sales drop
4) Marginal bookstores close
5) Marginal sales drift
a) away for ever
b) to ebooks
c) to other bookstores
6) Surviving stores will win sales and market share for print
7) Surviving (well run) stores will be more profitable even in declining print markets.
Fewer books printed means fewer sold in bookstores, who will no longer be able to stay open. Without bookstore orders, publishers will print even fewer books. And so on.