I think you might be confused, albeit by a poorly written Wikipedia article.

First of all, it isn't clear what it is meant by "removing the waitlists and expanding access to all readers". It doesn't seem to mean uncapping loans without backing them with physical books. In fact, the part of the wiki you quoted is the first of two mentions of the word "waitlist", a word that doesn't appear in either of the sources cited for those sections.

• https://www.authorsalliance.org/2023/03/20/judge-hears-oral-arguments-in-hachette-book-group-v-internet-archive/
• https://www.eff.org/files/2023/03/29/188_opinion.pdf

In fact, the first cited source says this:

IA’s attorney argued that the publishers had not offered empirical evidence of market harm in this case, focusing on the fact that when a library lends out a CDL scan, it does so in lieu of a physical book, “simulating the limitations of physical books.” This is due to CDL’s “owned to loaned” ratio requirement: a library can only loan out the number of CDL scans as it has physical books in its collection, and can only loan these scans out to one patron at a time.

And this:

Plaintiffs discussed what they see as massive financial harm stemming from IA’s CDL program, which they estimated to amount to “millions of dollars in licensing revenues.” Plaintiffs also emphasized that, were CDL “given the green light,” or upheld as a fair use, the plaintiffs would suffer even greater losses.

And this:

CDL is a longstanding and established practice, which has seen adoption and growth in libraries across the country while the ebook licensing market has continued to thrive.

So it seems easy for me to conclude, having checked Wikipedia's sources, that the plaintiffs are challenging the Open Library CDL system itself, as a threat to their profits, even though IA was playing by the same rules as every other library system, and that IA losing this fight will be a major blow to libraries across the country:

The judge also questioned whether CDL actually could represent such a loss: the publishers’ argument rests on the premise that libraries loan out CDL scans in lieu of paying to license ebooks, and were CDL not permitted under the law, IA and other libraries would instead choose to pay licensing fees to lend out ebooks. The judge pointed out that the result might in fact be that libraries would choose not to lend digital copies of works out at all, or would instead lend out physical books, undercutting the lost licensing revenue argument.

Tl;Dr: Everything I said was correct, and the publishers want to establish precedent that definites physical books and ebooks and separately licensed so that libraries lend out fewer books, and/or have to pay more to loan out the same number of books that they currently do. They just chose IA as the first target hoping that smaller libraries will be forced into compliance should they win.

Also, someone who knows how to effectively edit Wikipedia articles needs to overhaul that page, because it seems intentionally written to make IA look like they did something much worse than they actually did.