The major advantages of e-readers are that they require very little power, so the batteries last for months between charges, and they are front lit, so that reading an e-book is similar to reading a real book. This is because they use e-ink displays. They also have low refresh rates (in fact, once the page is displayed, there is no need for a refresh until you move to another page). At the moment, e-ink displays are not viable except in monochrome - although that will no doubt change soon.
Tablets, on the other hand use back-lit LCD displays which are very power-hungry in comparison, less comfortable to view at close range for extended periods, and not great in bright sunlight.
So it's horses for courses really. I imagine that like me, most people who have an e-reader also have a tablet for uses other than book reading.