As a quick test, try putting something plain over the patterned carpet like a towel or a sheet. It might be that the game is confusing the strong carpet pattern with the book.
Otherwise, I assume that the book itself has not been damaged - i.e. that the pattern on the book is readable.
I agree with you, the lighting looks fine.
A couple of things spring to mind:
1. Is the camera on "zoom" mode instead of "wide angle" mode? It should be on the lens setting with the Blue dot.
2. Perhaps PS Move has not calibrated properly and so the image is over saturated - try recalibrating the PSMove.
And some other thoughts
- is the book very close to the camera? Perhaps move the camera a bit higher if it is very close? - though as long as it is more than 40cm away you should be fine.
- If you could upload a video where you do exaclty what you are doing, but put a post-it note on the centre of each page (something to stop the book tracker seeing t'he central patterns and so it will not detect the book at all) - At the moment, it is hard to see what the camera is seeing (because the augmented book is in the way).