Need to store virtual machines with both the operating system and the reader/converter software included. There are lots of bits that can rot...

No, you don't lol. You do realize both the algorithm to decompress the media, and the media as well can be stored alongside, right? Including. any instructions to actually use that media.

Sure, but rewriting software in order to access books is a lot of extra work. I just store the VM containing the necessary tools and make sure it still executes in the new HW+os when they are upgraded.

Formats change. Could you use some disk image formats from old Mac emulators made for the Amiga?

Assuming the book is kept under good conditions, in a humid controller room, with nobody touching it?

Your point is moot. there's a reason we moved to digital media, and why nobody keeps paper copies of everything, aside for last-resort scenarios (which once again includes physical media that nobody ever touches)

Your books will be readable in 20 years. Not so with a USB drive.