I wonder what the truth is. In this article Kahle makes it sound like they are lending one digital copy for every physical copy that is locked up in a library somewhere and not circulating.

From what I understand that was the original policy but when COVID hit they announced that they were removing those restrictions. Commenters went “you’re gonna get sued” and then archive.org was all surprised Pikachu face when their mailbox filled up with lawsuits.

They say that now, but man I only remember them announcing that the limits were off whole hog.

Not sure what the legal standing is loaning ebooks based on "well someone else isn't using their book".

If so, then the lawsuit would likely be dismissed for lack of standing.

(Yes, yes, they may have loaned more copies of a particular work than they had, but those loans have expired now.)