What you're missing is that libraries have always been a thorn in the side of big publishers, and capitalism in general. Long before IA, they pushed to strip the power that libraries have and kinds of things they can keep, lobbied to cut funding. This is why you can't just take a book out of any library, you need a library card you got in person, even for digital lending.

Publishers have been kinda OK with libraries because copies are physically separate and inconvenient, the copies get dirty, and it's a status symbol to own your own copy. If those restrictions went away (digital copies are convenient and fast, they never get dirty, and it's the exact same as ownership), they'd definitely lobby against it.