I'm not sure what the big deal is Zinio has been doing this for years using a DRMed PDF format with embedded videos and slideshows and such. This looks to be pretty much the same thing with a newer UI treatment. Most of your favorite magazines are already available in the Zinio format.
Zinio is okay, but it is old hat. The problem with such page-turner devices is that they are essentially a magazine scanned to a PDF. Using them is clumsy and reading them is tough. For most page-turner software you have to zoom in and out and you quickly lose both where you are on the page, and your will to live.
It is an attempt to make print media more digital-friendly than simple web-pages, but users really hate using it. Time Inc's demo gives a great taste of how impressive this new digital format could be.