You're completely wrong. More people are reading books than ever before:

http://www.theatlantic.com/technology/archive/2012/04/the-next-time-someone-says-the-internet-killed-reading-books-show-them-this-chart/255572/

And there's further evidence that e-books cause people to read even more:

http://gigaom.com/2010/08/26/why-e-readers-are-good-for-books-people-read-more/

And that's just books, things look even better for reading if you factor in all the reading that happens on the internet. Tablets are better than alternative devices for all kinds of reading.

I have tried a few games on my phone...and nothing has been compelling despite all of them being free (although they try to get those micro transactions, no dice).

Sure, it is easy way to burn five minutes, but nothing I have experienced come close to traditional console, PC, or handheld gaming.

If my only option was phone gaming, I'd just give up on gaming (a staggering concept given my love of the industry). I understand it appeals to a great many people, but I simply do not get it.

Already got one tablet and will stick to it at least for two years. So the only gadget missing right now is a next gen console and that's what I will get.

In my case, I see some key advantages. Comparing with a laptop, it's lighter, has an amazing battery life, handy apps and is easier to use. Is perfect for when I wan't to read some news, watch videos, browsing and doesn't have all the hassle of a full PC. And a tablet is always on and ready to answer a email quickly and for reading some news. Reading is great too, better than carrying several heavy books. The price is another point, since a Nexus 7 costs US$ 200 bucks and delivers more performance and battery-life than laptops in the same price range.

Comparing with a smartphone, the size of the screen changes everything. Browsing, typing and reading are a pain on small screens. A big screen makes everything more comfortable. The battery is important too, since my tablet endures more time both in use and standby. The cellular radio on phones is a battery killer. Besides that, I don't want to use my phones battery, since I need it to call and text. In a tablet I don't have this kind of worry. 

Anyway, that's specific for my case. Some people will agree, other won't. Is a personal taste case. I'm currently not much interested in a new smartphone (my Android one is low-end and the other is a mid-end WP7), because the tablet can do so much more. 

It's not meant for just gaming, people.

Giving priority in the sense that they are not buying consoles at the moment because of "X product" that is getting huge chunks of their otherwise gaming money.

I have a friend who's buying the next sony xperia Z because the new 13 mpx camera is just what he wants for instagram worship. He digs Sony stuff, but he's moved onto the smartarena of devices as his primary meaning of entertainment. And by entertainment, I mean reading, browsing, casual games, music.

He bought PS3 on launch, and couldn't care less about the new upcoming PS4.