Lowbrow books are a kind of lowbrow entertainment. That's not strawmanning, that's poor communication.
Metalsmithing is traditionally among the most dwarven of crafts, metal smiths are the least likely dwarves to suffer unfortunate accidents in most forts, and stone slab stories fit in well with dwarfiness IMHO.
Reading strikes me as a good hobby for any era with literacy and books, especially if dwarves are as...obsessed? with history as many fictional dwarves are and the fact that a fair percentage of the engravings festooning fortress walls are random historical events. Besides, who else would record the legends so accurately? Goblins? Elves? Kobolds?
Yes, lowbrow books are a kind of lowbrow entertainment. But they didn't really exist at that time nor were they affordable to the masses.
As I said about the stone slab stories and about the metalsmiths, even if they are respected by the players, that doesn't mean they will be able to read. I personally respect my soldiers a lot, and I know they can't read for toffee. Given that books, paper, stone slabs and the like are expensive and difficult to make, and require a lot of training and education to have people that can produce them, I don't think it's very likely that we would see widespread books. In real life, civilisations that relied on stone slabs for their writing like Ancient Sumeria had very low literacy rates.
Reading would appear to be a good hobby, but it is just impractical. I am not against the hobby appearing among specific Dwarves - scribes, wizards or monk-like characters for instance - but not among the average Joe. Furthermore, there is nothing stopping classes of Dwarves from writing or recording history. I agree with you on that - Dwarves should be recording history vorraciously. But not all Dwarves should be able to read it. Instead, the masses could learn about history through engravings on the walls and pictures, as you have said. It's not like engravings rely on any text to get their message across.
All this said, Dwarves could be an exception. It would be quite cool if Dwarves were generally so advanced that literacy was quite high among the rank and file, maybe the humans could be similar to the societies I've been prattling on about. You would have to have some kind of education system though.