Reading, of course, educates, informs and entertains us. I think all three aspects are vital and should feed off each other.
This is where things like the Horrible Histories series have done so well - information presented with humour goes down better, especially with youngsters, than straight facts presented in a more traditional way.
I read chiefly for pleasure but I also read to research and to expand my knowledge on things I may well write about, either in fiction or for Chandler's Ford Today at a later date.
Things I know I will want to read later I will either download straight to my Kindle or send to it (and this is so useful. I often catch up with reading here when on train journeys).
So does literacy and the love of books still matter? Of course, it does. It always will.