Their counter-argument isn’t a legal argument. They’re saying they did it because they think the publishers aren’t being fair.

And they’re talking mostly about format-conversion, which isn’t the problem here.

You can absolutely make format conversions to digital for archival purposes. What you cannot do is them make a bunch of copies and give them away for free simultaneous use. That is not fair use. That’s 100% piracy.

The CDL was built specifically to ensure that only one digital copy was on loan for each owned copy of the material because the IA absolutely knew that was the law.