Most digitized books, especially those by Google, are atrocious when it comes to illustrations. They are indeed grey/black smudges lacking the detail of the originals. Mind you some of the hardcopy reprints of out-of-copyright books are equally atrocious. I recall a 'complete' Sherlock Holmes book where the illustrations were scanned with an over-the-top contrast. Comparing those illustrations with those in the original Strand Magazine was a revelation as to just how butchered some of these things can be.
That said I dislike e-books intensely they do not give me the same tactile feel. I can't quickly scan back through the pages to relocate something. Having read a book I can recall where in the book some information was, and whether it was on the right or left hand page or not. I cannot do that with an e-book. I mostly read non-fiction and like to jump about within the volume, again that is not convenient with e-readers.
So although we have a kindle it is mostly unused.