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When you download library books to your computer, typically you have already installed a free program such as Adobe Digital Editions (ADE) to which the e-book automatically downloads. This copy of the e-book is DRM protected and is readable for your loan period on your computer through ADE. At the end of your loan period, the book becomes unreadable...the file does NOT auto-delete, you must physically delete it from your computer.
If you wish to read the library e-book on a Kindle, after downloading to ADE, you must convert it from epub format to a format readable by the Kindle (the most commonly used one is the MOBI format) and strip the book of its DRM. This is usually done through another free program called Calibre which must be install separately to your computer and have a plug-in must be installed which does the DRM stripping while converting from epub to MOBI. The e-book is then sideloaded or wifi'd to the Kindle. At this point, the e-book is readable by a Kindle and no longer has a time limit on its readability.
The setup is not particularly difficult (about a 3 out of 10) nor time consuming (about 20 min). Once setup, the process is fairly seemless (takes longer to describe than to do).
The legality depends upon where you live. The morality/ethics depends upon your own personal compass. I choose to delete the books when I am done reading them.
I have no knowledge of how things work with epub reading e-readers, I assume it is more straight forward, however you are constrained to reading the book within the loan period from the library as it will become unreadable after the time is up. At my local library, you are not allowed to renew e-books, you must check them out again...as there are few copies of each e-book for loan and a LONG wait time to hold and download, this can be annoying.
Hope this makes things more understandable.
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