[marcusbooster]

This won't be popular but how about; classes choose which textbooks they require, total cost per student is determined and added on to tuition, the university can now distribute copies in digital or paper format. Keeping it all electronic would lower costs all the way around and still get the authors paid.

[ramchip]

My uni offers access to quite a few engineering books through www.books24x7.com, which is somewhat similar to what you suggest. Teachers usually suggest paper books though, so people can bring them to lectures, etc. (about half the teachers forbid using laptops in class).

[skorgu]

This is the way I'd like to see things move. You pay tuition, the university handles the licensing and distribution. Of course it would probably raise prices or reduce availability for those outside a school.