Why do you think he watches her reading?
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I think the Commander enjoys watching her do something so cherished. To have the ability to read or anything else taken away that you enjoy would be devastating. Her face while reading much be one of pure pleasure; I think he likes to see the happiness in her her.
The Handmaid's Tale
This is forbidden and I think that the subtext here is that he finds it alluring.It is probably how forbidden it is. The Commander finds Offred special and the reading adds to his rather strange desire.