Is iBooks Author suitable for producing poetry?
Yes. Actually, what iBooks Author excels at is letting you format your text precisely, with elaborate styles and style sheets, and preventing the user from changing the font, point size, or theme. You get tremendously precise formatting and layout, and the user can't change anything at all in landscape orientation, while they can scale font size a bit in portrait orientation.

Here's the main drawback that I have just discovered myself: iBooks Author will only output books that can be read on an iPad with iOS 5 running the new iBooks 2.0. The book you create with iBooks Author cannot be read on an iPhone or iPod Touch or anything running iOS 4.2.1 or iBooks 1.0.

Secondly, the file size of a book that is all text (no illustrations) is HUGE. I'm talking 20 times as large as it should be. I've tested it. A book that was 900K in size created with other tools becomes 20MB in size when created in iBooks Author.