I have been using an Online subscription e-library for a little while now,
http://www.safaribooksonline.com/ and
http://search.safaribooksonline.com/. While having access to such a huge repository of books is fantastic and worth every penny (subscription is not to much). I do quite miss a download option, in fact so much so that a DRM'd book limited to say a month would be a godsend.
To be honest any DRM when related to a subscription service is more than acceptable. Of course it becomes an issue when you purchase a copy.
If google aim for a library focused solution (subscription)I do hope they include a downloadable version. It seems peculiar that a proven business model even if it very narrow in focus has not been copied by any others yet, perhaps google may manage this, lets all hope that in doing so they are able to increase the market for offline readers and not only focus at existing desktop / online technology.