I have been following the debate [battle?] between public libraries and publishers over eBooks for a year or two now. The latest blast was posted on the Digital Book World [DBW] site. I received an email post on it this morning. The American Library Association reported statistics that library borrowers buy on average 3.2 books. The need for constantly hammering publishers with these numbers is real. Some of the big legacy publishers will not allow their eBooks into libraries, others limit the number of times a patron may borrow a book, all allow only one eBook to be lent at a time.
Mike Shatzkin in this blog post details the arguments on both sides neatly. To summarize - libraries point out that making eBooks free for borrowing stimulates sales of eBooks - that is, people use libraries to discover books, then when they find an author they like, they tend [well, maybe 'tend' is too weak, given the 3.2-1 ratio of library reader to book buyer], they buy.
Publishers on the other hand, fear that making all books available free as eBooks through libraries will foster a habit and an expectation that books should be free.
It is the wild west out there now.