As I said, the "traditional" CDLs were also in a legal grey area. But once the publishers are suing IA for going full Library Genesis anyway, why not also include those?

I went back to one of the older articles I could find on this subject, from before the lawsuit was filed. Some particularly-relevant excerpts:

Until this week, the Open Library only allowed people to "check out" as many copies as the library owned. If you wanted to read a book but all copies were already checked out by other patrons, you had to join a waiting list for that book—just like you would at a physical library.

Of course, such restrictions are artificial when you're distributing digital files. Earlier this week, with libraries closing around the world, the Internet Archive announced a major change: it is temporarily getting rid of these waiting lists.

...

James Grimmelmann, a legal scholar at Cornell University, told Ars that the legal status of this kind of lending is far from clear—even if a library limits its lending to the number of books it has in stock. He wasn't able to name any legal cases involving people "lending" digital copies of books the way the Internet Archive was doing.

...

The legal basis for the Open Library's lending program may be even shakier now that the Internet Archive has removed limits on the number of books people can borrow. The benefits of this expanded lending during a pandemic are obvious. But it's not clear if that makes a difference under copyright law. "There is no specific pandemic exception" in copyright law, Grimmelmann told Ars.

Ironically the FAQ that Internet Archive put online has been taken down, but I found it in their Wayback Machine. It says:

The library will have suspended waitlists through June 30, 2020, or the end of the US national emergency, whichever is later. After that, waitlists will be dramatically reduced to their normal capacity, which is based on the number of physical copies in Open Libraries.

So it seems pretty clear to me that by "suspending waitlists" it means that they're going to "lend" more copies simultaneously than they actually have.

The Internet Archive had been poking a bear with a stick for years and the bear had been grumbling but not otherwise responding. So they decided to try giving it a whack across the nose with the stick instead. Normally I'd just sigh and shake my head at their stupidity, but they're carrying a precious cargo on their back while they're needlessly provoking that bear, and now they're screaming "oh no my precious cargo! Help me!" While the bear has a firm grip on their leg. That makes me extra frustrated and angry at them for doing this.

I'm not siding with the bear here, I should be very clear. The publishers are awful, the whole concept of copyright has become corrupt and broken, and so on and so forth. But the Internet Archive isn't supposed to be fighting this fight. They were supposed to be protecting that precious cargo, and provoking the bear is the opposite of doing that.