There's a big difference between "the library" and "the library, where you use a photocopier": when a book is in more demand at the (normal) library, they buy more copies. That translates into more profits for the author. Authors like libraries for this very reason; authors do not like libraries-that-photocopy. Fortunately for them, there seem to be very few libraries where, if you go to check out a book, the librarian offers to photocopy it for you instead.
The change the Internet Archive made is that they previously had a model of lending e-books that were backed by physical copies, and now they have a model of letting as many people read the e-book at once, without reference to physical copies. That means they've shifted from the library model to the library-that-photocopies model.
Also, the photocopier at every library I've seen has a sign warning against non-fair-use copying of copyrighted material. So, one big difference is in intent, not just scale. Your average library discourages you from feeding quarters to the photocopier. This one has posted a sign arguing that unlimited copying is fair use for the next few months, and is handing you a roll of quarters.
I mean, that's also definitely copyright infringement. Scale just gets you attention from the lawyers. There are extremely narrow exceptions, see page 6 here: https://www.copyright.gov/circs/circ21.pdf
Most university libraries keep a copy or two of every textbook on hand, but don't actually allow you to check them out. Students pull it off the shelf long enough to photocopy the pages they need, then put it back.
Often groups of students get together and take turns making multiple sets of copies for the whole group.
A few times I actually had professors that were nice enough to make copies for the students ahead of time.
One professor even went to the trouble of having a local print shop print and bind the copies in paperback. We had to pay something like $10 to cover the costs.
Is any or all of that copyright infringement? Is there an exception for universities? Is this just a case of the law being so disconnected from reality that people don't even know they are breaking it?
Snark aside, how is this any different than going to your local library and feeding quarters to the photocopier? Scale?