I really liked reading your story. I might try that fish/worms/rabbit farm idea!
My father, who just like me is an IT consultant wrote an article in September 2008 that I feel is complementary to your story. He writes monthly articles (or should I say editorials) about IT in a non specialized language. Unfortunately they are written in French. Here is a very quickly done translation of it for English speakers. Please note my father worked for a lot of big organizations : banks, government, insurance companies, universities and big companies.
For the 400th anniversary of the town of Quebec (Canada), the city was the host of the worldwide congress of The International Federation of Library Associations and Institutions (Homepage | IFLA Website). The people attending the conference said all big libraries are digitizing their collections. A few examples : www.banq.qc.ca, Bibliothèque nationale de France, Europeana - Homepage and Library of Congress Home. They do this to warranty the preservation of the collections and a to allow a greater diffusion of the information. But this is very relative, as the people who would need access to the information the most don't have access to the Internet... Just think of the people in developing countries.
It is also interesting to see that a lot of the new writings are published only on the Internet. Publishers don't bother to print them on paper. Even the authors write their "manuscripts" using their computer.
If everything is digitized, why not destroy the paper books? Who would really want to do something that extreme? Never forget that governments like to cut expenses. Imagine they decide to close libraries, send books to the recycle bin and sell the now useless buildings. Wow, a lot of public money could be saved! And what a disaster for culture...
Humans could very well face an extremely risky situation. What will happen to the knowledge that is preserved in the books for generations to come? Our kids could be incapable to read the electronic medias (media as in CD-ROM, hard disk drive, USB memory stick, etc...) because the technology is obsolete or because they are inaccessible for technical, political, commercial, economic or moral reasons. You don't believe this can happen? It already happened: a big respectable organization (which I omit the name so as not to embarrass them) lost its computerized archives of the 1970's because it could not find a magnetic tape reader able to read its 1/2 inch magnetic tape archives when it wanted to read them in the 1990's. Today, the organization copies all its archives yearly to avoid such an incident!
We must also stay aware of government censure. If the paper books were destroyed, censure of electronic medias would be very easy (just look at the Chinese government policies).
The lost of an important quantity of written documents could cause a backwardness similar to the Roman empire's end. Let's not forget that Europe took about 1000 years to recover in all human spheres (politics, economy, sciences, nutrition, transports, culture, arts, technologies, health).
Now, let me add my own tough to my father's ones: digital information is really easy to destroy. A lot of natural and human caused phenomenons could destroy all digital knowledge in a few minutes. Also, information get erased naturally from CD-ROMS, USB memories and hard disk drive a lot faster than paper writings would be destroyed (provided they are kept in appropriate conditions, which our ancestors were able to do even with very basic technology). Finally, digital medias become useless if you don't have access to electricity.
Interesting. I firmly believe that the internet will come under organized attack, even more so than it already has, by governments that have need to control the flow of information. Even perhaps to the point of shutting it down completely.
Well, the way the Internet is built makes it hard (I haven't said impossible) for one person/organization to decide to "shut it down". But one person can for sure affect the Internet bad enough to have incidences in the "real" world. And this already happened several times since the Internet was launched. As you said in your story, the worrying fact is that now many people depend on the Internet for their daily activities. A major failure of the Internet could mean real economic problems, as well as a lot of other problems. So, yes, we must now include an Internet major failure in our list of potential bad situations.
One country could very well decide to try to stop its citizens from accessing the Internet. I said try to, because it would be very hard for a given country to make sure nobody still have access to the Internet. There are so many ways of transmitting data nowadays. I know people who have implemented devices to connect ham radio to the Internet. You can also use cellphone (not necessarily a big network they can control), a satellite (which is quite complicated to block) and a lot of other techniques.
What is more concerning is the fact that humanity is transferring all its knowledge to the Internet. I mean past, present and future knowledge. When all knowledge is digitalized and paper is destroyed, if something/someone makes it impossible to access our collective data or even worse destroy it, then we're in deep sh...
Like many preppers know, electronic devices and electronic medias (hard disk drives, flash memories, etc) can all be killed by things such as radiations (caused by humans, foreign invaders or more simply by cosmic events).
Paper too can be destroyed of course, and your teenagers would say it is more fragile than their USB stick. Well, paper will be damaged by the same things that would damage a human body. Paper will sustain the same things as human body would. So, if a major flood, fire or whatever happens, books are lost, but most humans are too. However, a lot of events may happen that could damage most electronic devices (and thus digital knowledge) and let all human bodies unaffected. This is much more concerning, because you have million of humans alive without knowledge. I prefer the situation of only a few humans alive without knowledge. Or the situation of most humans alive and most knowledge preserved.
What I want people that are not knowledgeable about computers to remember is that we must make sure our governments always keep our collective knowledge on at least 2 kind of medias that are different enough that together they ensure our knowledge can't be lost during a single event!
Finally, let's not forget the deepness of human stupidity. Those of you who don't know the story of the Library of Alexandria should read about it (Library of Alexandria - Wikipedia, the free encyclopedia). Internet is the next Library of Alexandria and could very well have a similar story