As for authors, nothing changes here: libraries lent their physical books without paying before.
[1] My favourite library branch in my town is, while associated with the city library system, partly volunteer-run and was consequently the last to computerise its lending system, and therefore kept on using the classic system until I think somewhere around 2010 or so, whereas the rest of the city library had already switched in the 90s.
I remember seeing books that had been lent easily over 100 times.
Not to mention a book can be rebound by a library if it's purchase price is high.
While I understand the plight of publishers, I also think digital rights favor them too much, atm.
In almost every other country in the world libraries do pay a royalty to lend books.
It's notable that the IA service was not geofiltered to the US only.
The IA doesn't geofilter it's availability, and therefore it is subject to the laws of the country it does any substantive distribution to, same as every other website in the entire world.
I mean, sure, but ~270 congressmen declaring it would also change it, and it would be viewed as legitimate. Quite probably against the same level of protest.
The amount of say the authors have doesn't actually seem to impact legitimacy much. That only seems to vary with the amount of power the person declaring the change has.
It benefits the publishing megacorps on a different basis, authors make very little on book sales or loans.
You may argue that that shouldn't be the paradigm, but one library unilaterally changing it denies the authors their say on the change, either through licensing or legislation.