> Something went very wrong in negotiations here. That's all I can say. Who allowed this deal to be penned in its exact fashion?

I'm not sure this is the right way to look at it. It's more likely that nobody "allowed" the situation to happen, and the publishers just had much stronger bargaining power. So libraries either pay to participate and adjust their budget accordingly, or don't have e-books to lend out.

Or, put more provocatively in a forum run by a startup incubator: capitalism allowed this to happen.

My local library does appear to have a large enough budget to cater for this new demand but I can understand if many other city libraries don't.