In the sense you're using "library" here, the Unix utilities are libraries--more precisely, they are library functions; the whole set of utilities is the library. So McIlroy was a library/framework writer.
> Most code, even when written with intent to be reusable -- isn't.
I more or less agree with this; but fortunately, you don't have to look at "most" code to find code that is reusable. As witness, once again, the Unix utilities. Or, for that matter, the Python builtins and standard library that I used to build the Python versions of the "word count" program.
Moreover, even if you're in Knuth's position and don't have a good base of reusable code to draw on already, it still makes a big difference how you proceed from there. Do all app devs write big monolithic apps? I believe pg once wrote an essay about bottom-up vs. top-down programming, leaning heavily towards the former.