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Hi Brad, I think your idea has potential, but as others have said, there are some very definite problems. There are two ways that I could see this idea working, and both of them would have to have major publishers on-board. You would need to have a good selection, with regular new releases.
The first is a subscription type model, as others have stated, perhaps with variable pricing - $6/month to download (and keep) one book, $10/month for two books etc, or for voracious readers, some annual subscription options of perhaps $60/year for 12 books, $100/year for 25 books etc.
The other model would be more of a library subscription. In this case a small fee (perhaps $5 per month or $50 per year) for effectively unlimited downloads, but the books would only be on loan for a limited period (perhaps one or two months).
Personally, I would happily pay for either kind of service (at the rates indicated) as long as I knew that the books I wanted to read would be available, and that comes back to the first point of ensuring that you have top publishers and authors as part of the scheme with a large number of books, including new releases. (Note that you could also tweak the pricing structure so that you have a certain rate for 'no new releases' and a higher rate for plans that include a certain number of new release downloads.)
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