Same for my university in the UK (most of our prestigious universities pride themselves with the quality of their libraries). I think it's more a case that there are only a single/few copies of each required reading book in the library and on loan, others miss out.
Yeah, this generally works for small courses but not large ones. The library can often come up with 10 copies of a book, but probably not 500 copies. It's how many grad students (who are usually in smaller courses or seminars) get their books, but undergraduates usually have to buy, borrow, or download their own copy, especially in the core classes that everyone is taking.
