As reported in Publishers Lunch, as of February 10, 2012, Penguin
"will no longer offer additional copies of ebooks and audiobooks for purchase via Overdrive" and is severing their ongoing relationship with the vendor.
Penguin and other publishers are concerned about security (especially in terms of over-the-air delivery to tablets like the kindle).
Authors want to make sure that they're fairly compensated - a library can loan out a physical book to only one patron at a time, and only so many times before they need to buy a new copy. But a digital copy could be loaned out to multiple patrons simultaneously - and because it's digital, there's no wear-and-tear.
And library patrons (Readers!) want to be able to get e-books from their libraries.
In Australia, they have a system called "Public Lending Right"
Public Lending Right (PLR) and Educational Lending Right (ELR) are Australian Government cultural programs which make payments to eligible Australian creators and publishers in recognition that income is lost through the free multiple use of their books in public and educational lending libraries. PLR and ELR also support the enrichment of Australian culture by encouraging the growth and development of Australian writing.They have that system in Britain, too, where authors get about six pence per library loan. (In U.S.A. currency, that would be about nine cents.)
One possible path forward for publishers in the U.S.A.?
Following productive discussions between the ALA leadership and executives from Penguin, Macmillan, Random House, Simon & Schuster, and Perseus, there is some talk about at least one pathway to what some believe is an appropriate model for now: lending ebooks to patrons from within library branches, the same way physical media is lent, rather than lending ebooks online.
Illustrate and Write On,