Amazon & Co should simply add a "1-Click Borrow From A Random Stranger" button right above or below "1-Click Buy". No more need for external networks. Maximum efficiency.
Problem is the feature is probably not meant to be used this way. If there's money involved with lending somehow (and there should be since libraries have to pay too?) the basis of this feature will be some kind of mixed calculation which stops working once it gets overused.
If users organize themselves in networks like this, as opposed to just occassionally lend something to people they know relatively well, the next store might decide to not offer the possibility of lending in the first place; and the existing ones might see a need to restrict or remove it.
After all in the end they really really want you to buy those things, not borrow them.
So legal yes, but good for readers and fair against authors? Not sure. Part of me feels that if you don't actually have a friend you could borrow from, you should be obligated to buy it, since that's how it used to work with paper books. You didn't just ask random people on the street to hand over their books to you.
I'm not a book writer but I can understand their position somewhat; it's hard to see your work show up on a different site every day. And it's easy to make mistakes. You can't go by looks anymore either, many pirate sites give themselves a very professional look these days. So when you see something like that it's easy to think piracy first and ask questions later, unfortunately.