I believe this court ruling suggests that, while you are free to make a copy for yourself of a work you legally acquired, and you are free to lend or re-sell the original work you acquired, you are not free to lend or re-sell the copy you made, even if the original doesn't exist anymore.

Basically, the only thing you are legally allowed to sell is the exact copy you bought of a physical representation of a work, assuming it was created by an authorized entity. You do not legally own an abstract copy of the idealized work, you own a physical object which happens to represent a copy of that work.

Note that this is in fact very much how most people would think of copyright. If I buy a book and someone steals it from me, or it is there in my house and it burns down, I don't have some right to now obtain another physical representation of that novel free of charge, or to obtain a copy made by a friend with a xerox. My sole right was to that one physical copy I bought, and that no longer exists.