Circumstances around the COVID-19 lockdowns have been very unusual. If you consider the hundreds of millions (+?) of books in libraries around the world that were temporarily inaccessible to people, including children and students, I feel the IA's actions were somewhat justified, perhaps not legally, but at least morally. Young people losing months worth of time that could have been spent reading and learning constitutes an emergency in my mind, and the IA stepped up to help lessen the societal damages.
You could consider that because these many millions of book licenses were temporarily "invalidated" by circumstance, the Internet Archive simply rebalanced the scales by providing the same people who would have been deprived of books at their local/school library a similar means to access them. Such a scenario probably never even crossed the mind of anyone involved in IP law before COVID-19, but if it had there might be some provisions on the books for cases like this.
On another note, I would actually expect publishers' sales to increase during the lockdowns for the above reasons of books being held in purgatory at libraries. That publishers should profit from a global crisis in this way seems wrong.
Again, none of this is to say that the Internet Archive's actions were legally justified, but I think to equate them to pure piracy is ignoring the nuance and context of this extraordinary situation.
I desperately hope the publishers drop the suit and come to an agreement with the IA that doesn't result in the loss of this treasure trove of knowledge or the end of the organization.