Do Android 3.0 tablets have standby/hibernate mode?
As far as I'm aware, Android basically just doesn't work this way. You can turn off the screen ("sleep" mode) and put it into airplane mode for some extra battery saving, but there's no "standby" equivalent like on a laptop. The processor should underclock itself when you do this, too (how much probably depends on the device). And, as Lie Ryan points out in the comments, for phones this is largely due to the fact that a call could come at any time. I'd guess Honeycomb's behavior is essentially a hold-over from that since it's easier than rewriting it.

That being said, if you just want a book reader, you might consider something like a Nook Color. The Iconia is really a full-fledged tablet PC (though running Android), but something designed specifically for e-reading will probably offer better battery life.