I don't disagree with you on how things SHOULD work.
But the holy grail for business is "subscription model" (licensing) rather than "one shot sale" because it means (in theory) you work once then make money forever. Book publishers are doing the same thing.
Since book publishers hold copyright, they get to choose the terms under which electronic copies are made available, and we have four choices: (1) agree to their terms, (2) negotiate with them for new terms, or (3) reject those terms and do without the content or (4) reject those terms and use content illegally.
Book publishers have generally proven unwilling to negotiate terms so (2) is out. A library by definition cannot "do without the content" so (3) is out. That leaves libraries with two choices - agree or use content illegally. As Morrus already mentioned, a library that chooses to use content illegally quickly becomes a "closed" library due to publishers suing them into the ground - the Internet Archive tried to lend books beyond what it was licensed for during COVID and look how that turned out (
As Publishers Beat Internet Archive, Are Libraries The Real Losers? ) .
This leaves "agree to the publishers terms" as the only option for libraries. We may not like the terms. We may not think they are fair. But that is where we are. If you (or I) want to change it, pressure must be applied to lawmakers to change copyright law, pressure must be applied to publishers to enter deals "more fair" deals, or possibly both.