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You mean as in everyone who owns a book could digitize it and contribute it to the library to be lent out one at a time?

Technically that's possible, but the real argument being made by rightsholders (such as the publishers suing the Internet Archive) is that they don't have the right to digitize it and lend it out, because that would be them replicating the work, and thus not just lending out the same copy, even if it's identical in practice in terms of how many people can access it, and what its content is.

Under current copyright law, you're going to be sued into oblivion if you try that.

Though to be fair, the main case being made in court that really holds water is that the Internet Archive lent out unlimited copies of digitized copyrighted works during the pandemic when many libraries where physically shut down and unable to offer books. Practically speaking, they did the morally correct thing by providing access to materials that would otherwise have been available, barring the extreme circumstances of the pandemic, but since the publishers thought they deserved to profit from that by selling every student who needed reading material in closed libraries a fresh copy of the book for $20, the Archive is now facing legal consequences, because that's technically still illegal.

However, if you want a communal library, you kind of get that with things like Little Free Libraries, where you can contribute any book, and books regularly cycle through the neighborhood over time, groups like BuyNothing, where you can very easily have people request and hand off things they no longer want themselves, including books, and you can always technically just start a local group that gets books and lends them like a traditional library would, although some libraries just accept donations of your used books and can lend them out without any additional administrative effort or separate entity set up in your community. That depends on your local library though, if you have one at all.