This seems like a bit of a cop out. You could borrow a normal book from a library and photocopy it as well. It seems like IA is doing everything they can to try not to exceed the 1:1 loan ratio.

I've been recently working on a project in digital book distribution for libraries, and the terms that publishers want to force on libraries for digital distribution are pretty harsh and enforced by DRM by the publisher. Things like you can only loan this book 50 times before renewing its license.

IMO thats what this is really about, trying to undermine the clever work around of digitizing physical works and loaning them like a normal library would so that is can be replaced with a more revenue friendly model where publishers can dictate terms using DRM.