There is an excellent discussion of this subject by the author and his commentators at Morris Rosenthal’s blog, Self Publishing 2.0. Here’s a taste:
In a brave new business model, the library might offer the patron the opportunity to purchase the book for a “donation” that covers the immediate costs associated with downloading and printing it. Otherwise, the book would end up in the library collection when returned, and the librarian could inform that patron that rationing is now in effect:-) As a long toothed library hound who is constantly checking out books from the stacks that have yet to be cataloged (and sometimes have never been read), I’m the last person who would suggest that libraries should exit the business of providing low demand books. But it would be more efficient and cost effective to provide these books only when the demand materializes in the form of a patron walking in and asking.