Roughly correct, but: the main issue turned out to be whether even the 1:1 lending was legal. That's what the initial ruling clearly denied IA, and contesting that is the focus of the IA's appeal. (The appeal also asks, in a small aside section 'II', that if the general idea of 1:1 controlled digital lending judged acceptable, that the ruling with regard to the temporary "National Emergency Library" expansion also be reevaluated in that light.)
Some of the language in the Cornell page implies to me it's specific to "preservation" copies, not necessarily other format-shifts for lending.
But the interactions of tradition, legal precedents, and different laws in different places are complicated, and subject to interpretation & various shifting balances-of-considerations!
That's why it's silly when armchair opinionators casually judge, "IA clearly did something wrong". There's a lot of room in the law for fair-use copying, even against the rightsholders' strongest wishes, and especially for librarylike activities.
