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While I agree with your point, there is some nuance because transfers can be nearly instantaneous. Physical books have to be transported to and from the library. CDL is as if we all lived in the same library and could shelve/swap books with anyone at any moment and only have to wait when there is a queue.
That's what the internet does: it makes things that took days or weeks before (nearly-)instantaneous. If I have 100$, I can lend them to someone (via paypal or whatever), and when I get them back, I can immediately give them out again. I don't have to wait for them to physically go to my place (or a bank) and return cash.

If your whole defense hinges on "borrowing books has to have an inherent delay of X hours/days/weeks before they can be given out again", that's a very weak point in today's day and age. It's like saying "sending mails is bad because it is nearly instantaneous, and you don't have to wait for the postman to deliver your letter".

As an author it means my book is less likely to be purchased directly by impatient library patrons.
I'd argue it probably doesn't affect it. I have certainly not seen any stats to support that argument. I most certainly would not wait to compete with the rest of the world to read a book once my spot in the queue finally arrived. I would simply buy it.
hm. That sounds valid on first thought.

On second thought, I don't think the demographic of "people buying (your) books" and "people borrowing (your) books from a library" have that much overlap.

People who borrow books from a library are usually people who either don't want to (or can't) buy all the books they like to read. In that case they are unlikely to buy the book anyway even if they can't find it in the library... OTOH people who love your books or your writings, or people who saw a review and think "I'd like to read that book" will buy it anyway and not read a scanned version of it on their small phone screen.

I mean I understand why authors would love it if libraries didn't exist and everyone had to buy the book to read it, I would probably be in the same boat if I were an author. But the calculation "1 borrowed book = 1 lost sale" is flawed the same way that software companies' "1 warez download = 1 lost sale" is flawed