Yeah, its a weird (and stupid) system. Libraries are toeing a fine line between getting sued vs not. They only got agreement for 'lending' ebooks if they set up a system like real books where if its out, you can't borrow it. This from the head librarian at the Sunnyvale Library at least.
I agree that it's silly from a technological point of view, but the libraries are at the mercy of publishers, and what else can the publishers do, really? If they let libraries "lend" out unlimited copies of books, who would buy them?