The number of people reading, particularly literature, is declining across the board. Even though this is completely unsurprising to anyone who knows how important literature is, it's still sad to see it so definitely proven. Every time something like this comes out, I have this knee-jerk reaction to pull out the Williams and marvel at his wisdom. In fact, wisdom is one of the main reasons reading is so important. Our judgment can be formed in two ways: through experience and through reading. Given that most people take a lifetime to become wise, literature—the observation and reflection upon human life—is an indispensable source of received experience and understanding. This is not the only benefit of reading literature, but it's an important one that cannot be gained from reality television, sitcoms, or the newspaper.
I've had some (probably typical) revelations recently regarding just how lucky I was to have spent my youth as a big, big reader. Setting aside entirely the questions of critical thinking and comprehension, it gave me a huge head start in terms of emotional maturity, despite the fact that I spent much of my youth pretty aggressively antisocial. I've recently gotten to know a few people who spent their younger days in more dissolute, but more worldly, pursuits - these are the type of people who have mid-life crises when they're 32.
That said, I would take issue with you on the "books or experience" point - I don't think it's fair to deny other artforms' ability to help people develop themselves. I think that what makes literature particularly strong on this, though, is its relative accessibility (counterintuitive, no?). You can read a Dostoevsky and understand very little of it, but it puts you in a position to successively bootstrap yourself into greater levels of understanding fairly quickly, whereas really understanding what (say) a painter is trying to convey takes far, far more exposure, and usually at least a bit of specialized training. Which, lord knows, I got pretty much none of in literature until I hit college. (Take that, Mrs. Joyce!)
Good point about other art forms, but I think there is a distinction to be made that favors literature on this specific subject. Visual art often has something to say about people and life as well, but the medium itself elevates aesthetics and form above content to a certain extent. For example, what are the Abstract Expressionists or the Surrealists trying to say that will help you understand life? Similarly with music, the emphasis is harmony, melody, rhythm—in short, sound. Of course, here we come to the crux of the matter. Visual arts are non-verbal. Music often has lyrics that can instruct and question. There's a reason philosophy is written and not danced. That said, I'm not arguing that other arts aren't important in "developing oneself" only that what they develop isn't usually or primarily understanding of life and how to live it. They can guide you in understanding your own emotions, yes, but many of them are closer to pure physical enjoyment and abstract expressions of beauty than discussions. That, too, is a necessary and useful component of one's education, but it does not serve the same purpose as literature.
It should be pointed out that the methodology of the study excluded institutionalized individuals, which might've thrown off the numbers. 'Cause motherfuckers in jail be readin'.
I agree that other art forms are more aesthetically-focused. I think it requires more cultivation to appreciate a painting than it does a book - though the book takes more persistence. But a fairly cultivated person can interpret, perhaps not the artist's intent, but nonetheless what his work says about how people see the world. I'm not quite sure of a better way to say this.
One of the problems I've found in interepreting art is the necessity of knowing the history of the medium. Obviously, this can be true of any art form, but the visual arts seem to be particularly reliant on knowledge of context and history if you want to have more than a emotional or aesthetic reaction to the work. I wonder how much this is a result of the form itself. Without the ability to easily engage ideas and storylines, much of art seems to become a visual conversation with past artists.
I think it requires more cultivation to appreciate a painting than it does a book - though the book takes more persistence.
At the risk of overly praising the merits of reading, I have to agree. You've hit upon another one of the benefits of reading: attention span. The ability to concentrate and sustain a train of thought is a prerequisite to understanding many difficult topics. Reading helps train one's mind for this and is Yet Another Reason that "Reading is FUNdamental".