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Here's the central problem:
If you can easily borrow any book you want from the library, you would be either a fool or a philanthropist or a book collector to buy one. And that's not much of a funding stream for authors, editors, translators, and publishers.
OP author David Vinjamuri implicitly agrees with this, and hints that his answer is to require a physical visit to the library. Since most future book sales will be on-line, the physical visit requirement would indeed make borrowing harder than buying, and thus prevent a boatload of sales cannibalization. Many months ago, I advocated the physical visit requirement (with an exemption for the seriously disabled) on this board.
HOWEVER, what I've learned since then is that library patrons hate the idea. The bad publicity Random House gets when charging libraries $84 for a $10 eBook is microscopic compared to the bad publicity they, and the library, would get for sending granddad out in the rain and snow to fill up his Nook. Therefore, I'm afraid that requiring people to walk over to the library is a non-starter.
The friction that people do seem to be accepting is having to wait. So I guess the system has to be built on that. However, it would be implausible to make people wait for unpopular books. So letting the library list in its catalog all 800,000 Overdrive titles (of which no one library today buys/leases more than a tiny proportion) may also be out.
I hope that some libraries and publishers will be brave enough to risk small-scale physical-visit-required experiments, because no other form of friction is going to be strong enough to allow libraries to stock hundreds of thousands of copyrighted eBook titles.
Someone may say that the government should just force the publishers to sell eBooks to libraries. But, besides that it would devastate employment in the publishing industry, there isn't the slightest chance of it happening. No friction, no library eBook.
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