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Internet Archive: Digital Lending is Fair Use, Not Copyright Infringement * TorrentFreak
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Publishers absolutely were in the wrong, morally, but my point is that IA stepped out of the legal grey area and into what was completely wrong in law. Then, they (and apparently their argument still does) rely on a judge basically making the law up, and in doing so left no real option for the judge but to rule against them. Now, the grey area isn't grey anymore, it's explicitly prohibited.
If IA hadn't broken the one digital per physical copy rule, or if they'd settled out of court or done anything sensible with their lawsuit, they wouldn't have made the law worse.