What you describe as lending a digital copy, is making new copies. As a matter of engineering fact, the bytes were copied from one location to another; as a matter of black-letter law, that is making a copy in the sense that it is copyright infringement to do so without a license. That IA 'controlled' it to have only one outstanding copy at a time in hands other than theirs does not make it legal. The carveout saying libraries can make three copies does not cover them making hundreds.

If IA would like five dozen copies to be morally equivalent to one copy as long as they ask each person who received one to swear they deleted it before IA makes another, they can call their congressman and ask them to propose a copyright law amendment. They did not do this, and instead just knowingly violated the law repeatedly. Wailing about how libraries won't exist in the future is silly, because it just takes reforming the law to fix this, but IA seemed to be under the impression that as long as the rules would one day be amended, they could act as though they're already amended that way today.