I generally prefer paperbacks, for the usual reasons. But I also feel that ebooks do have a lot of potential that's kinda being wasted. I mean, you don't really have a lot of the production costs you do with physical books, do you - no paper or ink or printing presses. A lot more can be done with ebooks - illustrations are a lot less expensive, since you'd only be paying for the initial illustration. It makes the file a bit bigger, sure - but what's 20 MB these days? And if one considers adding multimedia content - imagine reading a Star Trek novel which uses an LCARS interface, or a Harry Potter book with moving illustrations! Less extravagantly, I could see ebooks which just emulate the experience of reading a physical book, with pages that really turn, and look like actual paper rather than flat white spaces.
Unfortunately, like I said, none of that's really being explored - I've tried my hand myself at designing fancy ebooks, which is how I know they don't take up much space; and there's Red Hen Publications, which mainly does Harry Potter fanfiction; but I've not encountered anybody doing multimedia ebooks, and the trend seems to be to go for simplicity, so that the user can resize the text and change the font as they wish, rather than doing anything really novel with the format, pun intended.