I don't know about the rest of it, but I've been expecting them to crack down on residency requirements.
It also doesn't sound like just one publisher is balking about that part:
In addition, our publishing partners have expressed concerns regarding the card issuance policies and qualification of patrons who have access to OverDrive supplied digital content.
Addressing these concerns will require OverDrive and our library partners to cooperate to honor geographic and territorial rights for digital book lending, as well as to review and audit policies regarding an eBook borrower’s relationship to the library (i.e. customer lives, works, attends school in service area, etc.).