My wife and I both own kindles and smart phones and tablets and we LOVE LOVE LOVE to read books. However, you seriously need to look at the abject failure of the major record labels and their arcane desire to sell expensive little plastic disks. Notice how well that's turned out for them... Also notice that Apple is now eating their lunch. Authors don't need publishers anymore, they really don't. What authors need are editors, for which there literally thousands graduating from colleges around the country just looking for a job. If I decide that I want to write a novel, I won't be going to you to publish it, I can self publish it through Amazon. This fast path to publication is going to be your death.
Frankly, trying to borrow an ebook from the library is a joke. Your current rules and regulations that tie the hands of libraries are turning off libraries and readers alike.
I think it's time to scrap your current profit model and do things differently.
Here's an idea... What you guys need is a Netflix of electronic books.
I would be quite willing to spend ~$5 to ~$10 a month to borrow X number of books per month. Not keep them, not buy them, merely borrow.
I understand where you guys are coming from. The idea of some book that you've bought from an Author for a bazillion dollars is going to get up getting pirated on the internet... Umm... I'm going to let you in on a secret... They're already doing it. There doing it because your current model is so obnoxious. There doing it because ebooks are tiny and easy to copy.
The wholesale theft of music and movies has basically become a trickle because things like iTunes and Pandora and Hulu and Netflix make it so easy to be a legitimate user.
Make legitimate use of your product easier than stealing and then charge a reasonable price and while initially it won't be as profitable as selling dead wood books, overtime people are only going to be using e-readers more and more. Amazon has a limited version of this but it sucks.
However, if being part of the "Library" people get access to books sooner, that would be an incentive for them to join the service and pay the monthly fee. There's a whole raft of things you could do with this.
Possibly I'm just a vocal minority, and possibly plenty of other people are completely happy. Though with the frequency that this topic comes up at the library and with my co-workers it'll only be a matter of time before you go the way of the do-do. Evolve or die.