It seems far more plausible that there was an exogenous factor causing the book boom in Germany: the number of Germans that actually knew how to read
The article hints at this when it suggests a German earned more in royalties (without effective copyright) for a treatise on leather tanning at the beginning of the century than Mary Shelley did for Frankenstein.
Either UK publishers were exceptionally bad at maximising revenue (or sharing it with authors), or there was a much greater demand for books in Germany which had little to do with the supply of cheap copies
A highly plausible explanation is that German appetite for reading was driven by compulsory state-sponsored primary education, contrasting with the part-time, parochial education available in the UK at the time.
Despite low literacy rates the UK did a pretty impressive job of industrialising in the 20th century; to argue otherwise is to ignore the rate of absolute progress in favour of dubious relative metrics in the manner of Wired's recent "web is dead".