I recently submitted a "book app" to the App Store, and it was rejected. Of course, I appealed, and they called today to discuss it.
To be clear, this was a simple book app. Full scans of all pages, pinch-zoom support, background music, page flips with sound, etc. But no real moving parts - it was a reading experience only. Apparently pinch-zooming doesn't qualify as "interactive" anymore.
The manager who called told me in no uncertain terms that they will not approve any books that could possibly be released under the iBookstore. When I brought up the thousands of similar reading apps out there, he said that the "App Store is evolving", and that moving those Apps into iBookstore books will "be discussed with the developers" when they submit updates. So if the book was up before the iBookstore, it's safe for now. If it's new, then the answer is no. He did encourage the reformatting of the book to submit to the iBookstore, which I'll have to take a look at doing, although I understand you must have an ISBN, and those aren't cheap to register ($125 each, from what found).
Obviously, this rejection is only for books you "only" read, as opposed to the fully interactive book apps (like Alice and the Three Little Pigs popup book).
I thought I'd share this to save others the time of building a "traditional" book app only to get it rejected. Still, all coding is good practice, right?
(I will footnote that the guy who called me was very friendly and pleasant, and was very willing to discuss the issue in detail. Kudos to Apple for having real humans calling, not scripted drones.)