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Originally Posted by Wasabihound
It makes sense you can't read a Kindle book you've loaned out - I can't do that with a real book - why should I be able to do it with an ebook.
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Because you could, easily. Unlike with paper books you're not handing over the "original", as it were, you're making an electronic copy anyway. It's digital restriction management hard at work, trying hard to bring artificial scarcity to this new world of ebooks.
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It would be great if libraries could lend Kindle books (they would need to buy/lease multiple copies) and I bet they would like the ability to automatically get the book back after x days - maybe one day.... 
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Pretty much works that way -- for epubs.