Well, a couple things (don't know if they've been said)
1) game manuals were there to give you a mindset for the game. Having recently played doom, I couldn't personally tell you that the possessed human things looked human. Nowadays, it's no longer necessary to get that going, since you can tell things like that better.
2) game designers have learned "show, not tell" is very effective. It's a whole lot more engaging to a new player to a game to run a tutorial in-game than it is to spend 20 minutes reading a book before gaming.
3) I wouldn't really consider it cost cutting, if they still release a box set. Making a book is fairly cheap compared to paying developers to program an extra tutorial (unless you make tons of sales on the boxed versions). Even when the cost of the book exceeds the development cost, it is only after the game has sold enough that you have guaranteed profit on it. When you pay development, you havent guaranteed profit yet.
4) I skimmed through manuals back when I played, mostly for the art and a backstory, but I usually preferred to let practice/tutorials teach me how to play.
5) lack of required reading helps a game sell better.