Do any iPad e-book readers support sharing excerpts? Are there any e-book readers for iPad that allow the user to highlight a block of text and share it, either by email or blog post?  

Use case: 

While reading the fifth chapter of The Brothers Karamazov, the user has an insight into The Grand Inquisitor sequence and wants to blog about it.  The user highlights a sentence and activates a share feature, and the e-book reader copies the highlighted section into an email, or posts it to Instapaper, with appropriate annotation.
Amazon supports a "public notes" feature.  When you create a note or a highlight on a section using a Kindle or any of their apps, including the iPad app, it's uploaded to the Amazon servers and visible to you at https://kindle.amazon.com/kindle.   From there you can copy and paste into Instapaper or email if you wish.

On that site, you can make your notes public so that other people can see them.

For more information see https://kindle.amazon.com/faq