This is a pretty good article in the New York Times about how Libraries are filling a niche of books stores as the large bookstores are closing. Lots of libraries are trying to reinvent themselves as meeting spots, including coffee shops and large comfy chairs, study rooms, etc.
The article also talks about the need to balance what people want (popular fiction) with the need to have critically acclaimed fiction and research areas in an era of shrinking public funding.
Personally I am all for increased public funding of libraries. There was an interesting small research project by a retired teacher who interviewed avid reading high school students. She found that almost all avid reading teens lived within walking or short bike ride from a library. I could not find a write up of the research, just a mention of it in a blog post about this article.