> Libraries should be enabled to digitally lend their physical holdings and not have to rely on these eBook licenses
I've thought about this quite a bit in the past, and I don't think that would really make sense. A well designed digital library system operating under those restrictions would be nearly identical to one which didn't have to adhere to copyright at all. All you'd have to do is build a system which transparently "checks out" materials when the user accesses them and automatically "checks them in" after a minute or two of inactivity, and you'd be able to reduce the number of materials the digital library needs to purchase by a couple orders of magnitude over a traditional library. Add a few more orders of magnitude if they're allowed to tear individual pages out of books or split scenes out of movies and lend those out separately. You could probably put Netflix out of business with only about a hundred physical copies of every popular movie. (Which is practically nothing when you're operating on that scale.)
Publishers could, of course, increase the cost of physical copies of their works by several orders of magnitude to compensate (making them completely unaffordable for consumers in the process), but barring that I think the whole "you can only lend out one digital copy for every physical copy you own" thing would be more of a charade than an actual meaningful restriction over just abolishing copyright.