I've got no idea how bad or good the format is, but it seems to work quite well for what I've used it, better than PDF in allowing reflow/dynamic oage sizes, but still being a kind of self-contained static web site with search, ToC and index.
Late reply (i just noticed it but i reply in case you also notice it). Epub is basically a zip file of HTML files and an XML to provide some additional metadata (like a contents tree), though like CHM epub files do tend to limit themselves to basic HTML too as a lot of epub readers do not have a full web engine. It is quite similar to CHM though epub readers feel more book-like in their UX.
I've got no idea how bad or good the format is, but it seems to work quite well for what I've used it, better than PDF in allowing reflow/dynamic oage sizes, but still being a kind of self-contained static web site with search, ToC and index.