Do publishers prefer to sell books in paper vs ebooks?

I thought that the ebook publishing was flourishing. After all, there are at least 5 or more different kinds of ereaders, major bookstores support them - Barnes&Noble has the Nook; Borders support Kobo and the Sony eReader -, Apple has lots of different ereaders apps for the iPod and iPad, and even libraries lend ebooks. Everyday I see people in the subway reading on their Kindles, Sonys, Nooks, etc.
I still have a soft spot for the paper books, but I love ebooks. They're so practical! You don't have to deal with the space problem - and avid readers can collect hundreds or thousands of books... try to find a place to store them in your house -, finding yourself stranded with absolutely nothing to read, or having to carry around a bag full of books when you go on vacation. They're all stored in your device! What's more, with the new WiFi technology, you can browse and download books in seconds.
For me, there's an extra reason to love ebooks. When I lived in Chile, there was a very limited number of romance availables, or sometimes there were none! It also happened with less known fiction authors. I had to wait until I travelled to the U.S. to buy books, or buy them in Amazon and wait forever for them to arrive.
My experience with ebooks has been great, so far. Because of that, I discovered with surprise that some readers have had problems with the publishing houses, and sometimes find themselves discriminated - regarding prices, discounts, or availability of ebooks.
There is even a webpage where readers can post why they couldn't buy the ebook they wanted:
http://lostbooksales.com/
Are the publishers favoring the sale of paper books instead of ebooks? And if that is the case, why would they do that? Isn't it cheaper to publish an ebook? Keeping in mind the cost of the ereader device, and the lower cost of ebooks, shouldn't they be cheaper that their paper versions?
I think there's still a market for paper books. First of all, not everyone can afford an ereader device. Second, there still are people who prefer the paper format.
I think it's still cozier to cuddle in your bed with a paper book instead of an ebook, but I love the freedom the ebooks give you. For me, both formats are perfectly valid, and each one has its good and bad things. It's up to the reader to decide in which format he or she wants to read.