The key difference is that a physical copy of a book can only be loaned out to one person at a time, so it is in no way violating copyright. No copy is made. A lot of people will break down and buy a book that they really want to read if there's a long waiting list at the library (I've done this plenty of times). Once you cross over into the digital realm, you're talking about copying and distributing.
Unfortunately, I don't know what the digital equivalent of the library would be.
Unfortunately, I don't know what the digital equivalent of the library would be.