How do you figure we get around this problem? The ability to reshare infinite electronic copies of a work does make this a legitimate issue compared to a physical good. I don't have any good answer.
A scheme where you lend each copy you own to one person at a time and don't use it yourself, with them deleting the loaned copy at the end, and with a reasonably large granularity like "1 day", needs to be legal. And probably disallow publishers from blocking such a scheme.
If we had some form of universal income, or other form of distribution of goods such that people didn't need to labor for a living (at least not with the current US norm of 40-50 hours a week), then it would be much more practical to say that all books are free for mass consumption. Then authors can write not for compensation, but for the pleasure of writing and knowing their works will be appreciated. And writers with a famous profile, who want the spoils of compensation, can be sponsored/patronized, like artists in the Renaissance.
Profit they're only getting because they figured out a way to cheat the concept of ownership and get around the first sale doctrine.
> The physical restrictions in a library - ala, only 1 person could read it at a time - is what prevents publishers from trying to charge more or prevent it.
Publishers hate digital lending that doesn't give them money, even when it acts just like a physical book: one person at a time, takes hours to be restocked, etc. Restrictions like that don't stop publishers from fighting back; only precedent keeps them in check.