BMRR, I have said that my point of view concerns the 'hour and a half at the most' cruise type of operation. I agree with you about long/medium haul stuff where the reality of low arousal is more apparent.
That said I've seen with my own eyes and on more than one occasion somebody miss several radio calls in a row. Why? They were either concentrating on a crossword or reading a book. Or, to use your words if I may, they lost all sense of what's going on around them. I know we all miss radio calls occasionally but to miss half a dozen in the matter of 10 minutes is going beyond reasonable. What else would they miss?
To clarify my point it is easier to emerge yourself in a novel or the paper than in an Ops manual or something like the QRH. Therefore, I don't condone zero reading in flight but read something that you're not going to lose yourself in. And having thought more about this today I think the real problem is the attitude of the "book readers" rather than the fact that they are actually reading.