16:9 is pretty much good for one thing: HD video. For everything else, it pretty much sucks.
This is not true for very large screens, like the Apple's 27" display/iMac, but only because the sheer size of the monitor allows you to use it as a dual monitor. For anything much smaller, and especially, as you point out, for very small screens, it's a terrible aspect ration in almost all ways.
That's been my argument for years. As much as I missed the 12" PowerBook size I stated back in th day when the 13" MacBook appeared that going 16:10 just wasn't likely for 12" display an noted that even the 12" PB had a taller display than the 13" MB.
When Apple tablet seemed imminent I was worried that they would try to meet half way by going with a display that looked more en vogue but was ultimately poor for reading. I was estatic they went with 4:3.
BTW, why is the Kindle's ratio? Is it close to 4:3, too, or 3:2 like the iPhone? I'm not sure if eInk pixels are equal along the x and y -axis.