I didn't even know that e-books were available in libraries till I saw the article, but I did some quick searching and found out that Penguin was concerned about piracy. It seems that since then, the older books are back in the libraries but the new Penguin releases are not. This whole kerfuffle seems to have started when the service Penguin uses (OverDrive) added a Kindle availability, which is an Amazon product, and Amazon is hurting the publishing industry by continuing to sell real books at a loss to get customers. I stand by my original agreement with Penguin on this matter, if they are concerned, I am concerned (which is why I do not post more poems on FaceBook, I have read the terms of service), and I understand that Penguin is in the business to make money, not to give away free books.
With the re-evaluation Penguin is not giving in, but conceding that the abrupt pull out hurt readers. According to the linked article, the lack of fire-wall protection in the Kindle could allow the books loaned to be copied and sent to anyone, anywhere. Again, Penguin is not in business to give away books. The company will continue to donate books to libraries for regular loans, but is sticking to the security concern.
How true that is remains to be seen, however, as the fight between Amazon and Penguin (Amazon now wants to be a publisher as well as a retailer, stealing authors from...hold on...Penguin) continues to rage. Could this all be a simple case of one publisher not wanting to donate product to another publisher? I imagine that is part of it, but, the piracy angle can not be overlooked.
I'll try to keep an eye on this, maybe more posts in the future about the whole publishing mess, including SOPA, the Stop Online Piracy Act winding its way through Congress.