The argument (or at least the main argument) IA is making is that CDL is fair use, so they're analogizing it to the "one at a time" nature inherent to lending of physical books. Of course actual physical lending doesn't involve making a copy and is more of a "first sale doctrine" type situation, so this is just an analogy.
This is why there was so much discussion around how this affects the ebook market: that's part of the fair use analysis, and often the most important part.
I've generally been of the opinion that CDL doesn't stand much of a chance of flying as fair use, but there's a non-ridiculous argument for it.
The period of uncontrolled lending during the pandemic is another matter that's less defensible, but the point of this case for the publishers is to kill "normal" CDL.