1) A significant proportion of the population, particularly older and poorer people, are not on line, and many of them may never be. Just because you are, and the rest of your middle-class young friends are, does not mean everyone is.
2) Libraries are free. Even if someone does hack Kindle etc and illegal sharing of books becomes widespread, many people who want to read are not willing to do anything like that. So libraries remain the only places that you can read for nothing.
3) Well managed libraries at least remain an important local resource for information, with the librarians a lot better than Google at finding local info (librarians aren't trying to sell you anything either). They also frequently act as a social venue.
M