If the Internet Archive's digitizing and distribution of old books is fair use then so is a video game ROM site that distributes digital images of pre-PS360 era games that are no longer available to purchase legally. except at exorbitant rates on eBay. And there's also a strong case for the original Napster being fair use if IA is.
I don't think there was ever any serious doubt that the Internet Archive would lose their case as they are clearly in violation of copyright law. The issue in the case is that the copyright laws are bad laws that have become contrary to their purpose of "promoting the useful arts and sciences" due to the copyright terms being absurdly long (and the lack of any serious deterrent to fraudulent DMCA claims which has allowed for the proliferation of such claims as a censorship and/or doxxing technique) and need to be reformed. It was unwise for the Internet Archive to violate copyright law just as it was unwise for Bowser the ROM site owner[0] to violate copyright law because flagrantly violating copyright law is an effective way to get yourself bankrupted via lawsuits and an ineffective way to get bad intellectual property laws changed.
If the ROMs are out of print then they should fall into the public domain.
One much needed copyright law adjustment would be to limit copyright protection to a period where the work is actually commercially viable meaning the owner is making an effort to sell it. It doesn't benefit anybody to have old works locked up for years and years with no way for the public to acquire them legally.
Libraries and archives have very little in the way of special rights when it comes to digital distribution of copyrighted works even if they have certain backup/preservation rights.
I don't think there was ever any serious doubt that the Internet Archive would lose their case as they are clearly in violation of copyright law. The issue in the case is that the copyright laws are bad laws that have become contrary to their purpose of "promoting the useful arts and sciences" due to the copyright terms being absurdly long (and the lack of any serious deterrent to fraudulent DMCA claims which has allowed for the proliferation of such claims as a censorship and/or doxxing technique) and need to be reformed. It was unwise for the Internet Archive to violate copyright law just as it was unwise for Bowser the ROM site owner[0] to violate copyright law because flagrantly violating copyright law is an effective way to get yourself bankrupted via lawsuits and an ineffective way to get bad intellectual property laws changed.
[0]: https://venturebeat.com/games/gary-bowser-has-to-pay-nintend...