I don't think that people stealing from libraries is a big problem. One could easily find any title on a forum or Usenet in a heartbeat and have it not only without DRM but also retrieve it instantly without the library hold times.
Using DRM on library books makes sense only because it enforces the lending period, if there was another way to enforce this, I would be against any encryption scheme. You can justify it any way you want, "I'm going to read it on my reader of choice, so I'll remove the drm." This is not really a good argument, and similar to the "I'll just download it illegally and keep it forever, because I never intended on buying it anyways, so no harm no foul the author loses no money for my use of this material."
I still believe the best solution would be for Amazon to release a library lending app for overdrive, or simply add EPUB support that supports ADE. They most likely will never do this, so most of us will just have to continue to follow our broken moral compasses.
There is another issue altogether, and it's that some authors set book prices for ebooks prohibitively high. I cannot see some people ever buying them at these prices. For example, you can purchase 1980 edition mass market paperback for 5$ (2-3$ used), or ebook for 17$ - let's be serious here, that's strong incentive to just not buy the book, get it at the library, or obtain it by other means.
I don't know why some authors do this, but why mark up a 30 year old book over 3x the price of a paperback for a digital edition? Are they anticipating loss due to piracy? IMHO they are encouraging piracy and prohibiting sales.