While this is obviously a welcome move, I see it as a short-term endeavour. As ebook sales continue to grow, following the trend of the past two years, there will be more and more pressure on book stores and on the traditional publishing paradigm. In the foreseeable future, I believe, ebooks will come to represent the major part of the market and this will, in turn, bring consequences for local lending libraries.
There is probably more demand for Kindle Library Lending on internet sites, thus making the service available to everyone without the need to visit a physical library. It will be interesting to see whether or not Amazon would support such sites or whether they would see them as a direct threat to their sales of Kindle books.