The reality, of course, is rather more complicated, and eventually, so was the Chronicle story. After oohing and aahing over the wonders of the Kindle and the Nook, with very little attention to the problems (for instance, Amazon deleting an edition of Animal Farm that they did not have the rights to, without notifying users, and in the process trashing a high school student's English research paper), eventually they visited several actual libraries, including the new Cambridge library.
And what did they find? Libraries are busy. Circulation is up, participation in library programs is up, and the main obstacle to libraries continuing to grow and expand in services is the inconvenient fact that their budgets are being cut. Partly, of course, because state and municipal budgets are under incredible pressure, but also because of the perception that libraries are "old-fashioned" and not really necessary in this modern age.
But libraries provide something that bookstores, including online bookstores, never can. It's not just a wider range of reading material than any individual can afford to buy. It's not even the fact that all that material is free. What they offer is librarians and their services--knowledgeable guides through both the fiction and non-fiction resources. Someone who's always glad to help you navigate both the print and the electronic resources--whether for recreational reading, or because you want more information on something the doctor said, or because you're looking for a job after twenty years with the same company, and have no idea where to start in making a resume, finding job openings, writing good cover letters.
Online resources offer information. Libraries, and librarians, offer the opportunity to turn that information into knowledge.