I'm using Instapaper to save web pages to read later. Instapaper is the same as many other 'read later' apps such as Pocket and Safari reading list.
I also want to save and read PDFs, but it seems the app can only save and read web pages. Can Keyboard Maestro somehow extract the text from a PDF and convert the text to a web page, which can then be saved and read in Instapaper?
In all honesty, I think the answer is no.
Keyboard Maestro cannot read the contents of PDFs (except by opening the PDF in an App such as Preview, selecting all and copying to the Clipboard).
From there you could possibly use the plain text to make an HTML but that would lose all formatting and images. And even then you would have to point Instapaper to that HTML.
PDFs opened in Safari can be added to Reading List and marked for offline viewing. Obviously, that's not as convenient as having all read-later content in one app, but it at least makes the content available at any time.