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OK, speaking as an ex-library user based in the UK, I have only ever borrowed physical books or other items from the library. I have never borrowed ebooks from them; partly because I prefer to own what I read which is mostly SF & F, often in series (which means having access to earlier books in the series when the new one comes out). The other reason is that the selection of SF & F has historically not been very good - UK editions, depending on what's available.
The issue is that by and large libraries are funded by the local authority, and aren't one of their statutory functions. As a result, library budgets aren't ring-fenced, and have been heavily squeezed in recent years as local authorities try to protect their statutory budgets. So, libraries now carry out other functions, just to keep going. Also, a lot of branch libraries have closed down - back when I moved to Cambridge in 1990, there was a branch library within walking distance, which was one of the first to be closed in the budget cuts (the site was extremely desirable and was sold off for development). When I moved out of Cambridge 3 years ago, I hadn't used a library for a good 5 years - my then local branch had reduced opening hours incompatible with work, and it wasn't convenient to visit the Central Library. Even where I'm living now, the only time I visited the library was to access something specific on their computers.
In terms of e-books, Cambridgeshire libraries used ADE, and that killed it for me. At the time, the version of ADE in use was flaky with Macs, and frankly I didn't want the hassle. To be honest, the same applies - I still prefer to own what I read, and guarantee access when I decide to read it.
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