From Wikipedia:
“Furthermore, they argued that the Internet Archive was not abiding by CDL, as it had acknowledged that its partner libraries were not always withdrawing their physical copies from their shelves.”
Are you sure no one argued they weren’t lending more books than they had? Specifically during the pandemic it is true that just kind of decided that it was probably the case that there were plenty of library books not being distributed (note books they didn’t own) so it was ok to loan basically as many copies as they wanted