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Internet service isn't free, you pay a provider; library membership only charges fees for overdue or lost materials.
So in your premise, the difference is the end user pays a premium to "get something for free" while potentially violating copyright laws...instead of using a free service that to a degree, compensates the content creator.
Of course, one can make a personal copy of the library's property, when borrowed...but blank media and disk drives and storage space all cost $...
Truly "free" content is rare like finding money.
Well, the libraries aren't free either--they're paid for with taxes. You just don't get charged when you walk in the door and check out a book. I've been paying for my local libraries for decades, haven't used one since college.