There is an “argument” because that does seem like common sense. It is nevertheless clearly illegal.

The ruling clearly addresses this in the section about the application of fair use to the idea of the CDL (that is, where the lending is controlled in the way we’re idealizing) and it was deemed obviously illegal. The very act of making and distributing a copy is what is infringement, and as the ruling clearly lays out none of the pillars of fair use come close to applying as a defense. Crucially, it is not transformative (it’s the same book used in the same way) and the entire work is copied.

The law is bad and it sucks and we need to change it. It’s depressing to me that so many really smart people don’t have a good understanding of this, probably because most infringement usually goes unpunished. We don’t get to deem it okay simply because it logically makes sense that controlled digital lending is obviously equivalent to physical lending. Unfortunately the act of making the copy and then distributing it changes everything.