What you're describing is not like a library. Libraries deal in scarce resources (physical copies of books). The point of a (public) library is to provide free information.

If you apply that principal to e-books, which cost almost nothing to copy, and therefore don't reasonably need to be checked out or returned, you have to remove all DRM, thus destroying the e-book business model.

Unfortunately, librarians have bought into the DRM mindset, and are putting into place (or planning to put into place) systems like the one you describe.