Have you or anyone you know of done a feasibility study for TeX-quality layout being done in realtime on current mobile hardware? [La]TeX itself obviously isn't well suited to the task even if you make the obvious optimizations like rendering each chapter on-demand as a separate file, but since it is the gold standard for automated layout with good typography it would be interesting to know where the bottlenecks are.
No, but since ebooks are just HTML documents the layout the code generates isn't particularly bad. It depends on the renderer of course. Renderers like iBooks even support fancy things like automatic ligatures and so on.
CSS is growing to include more typographic details like the ability to specify lowercase numbers, etc., and when the epub spec and ereader renderers catch up to that we'll be doing pretty well for ourselves. Maybe not TeX-well, but pretty damn well.
It's definitely possible to match TeX output on the HTML+CSS stack. PrinceXML is roughly there already, rivaling TeX for an output-to-PDF print publishing workflow. Unfortunately it's proprietary and expensive. Of the open-source renderers, the browser engines are probably the best bet to build on.
By 'lowercase numbers', do you mean https://en.wikipedia.org/wiki/Text_figures? I've never heard the term before, and initially wondered if it was some sort of joke, but it would seem not.
