I can hope that one day libraries will stop siloing themselves from each other and implement an efficient inter-library loan system that sends direct to customer.

It’s like they see themselves as competitors.

Assuming you're talking public libraries, it depends on the state. Some states do ILL much better than others, including lending through multistate compacts.

Having both a family member and a couple friends who are/have been librarians, I seriously doubt it is a competitive instinct. I'm sure there are exceptions, but most librarians are genuinely dedicated to information freedom. (They certainly aren't getting MLS degrees for the money...)

I doubt they'll ever mail it direct to your home, though.

Some libraries used to do that but media mail replaced the USPS service that they used.

In my area, about 40 regional libraries are linked and will ship most stuff to the library of your choice. They also accept returns anywhere.

It’s fabulous except for new bestsellers.

ILL exists, but as far as I can tell, it's limited to books.

I've ordered books from libraries thousands of miles away. It takes a few weeks for the books to arrive, possibly because they go 4th Class mail. But they get there eventually.

This depends on your library system. In parts of New York, ILL will send you DVDs as well.

It has nothing to do with competition. The biggest barrier is cost. ILL is one of the most expensive services libraries provide.

Here in San Francisco we have a pretty robust inter-library loan program (Link+) but unfortunately it's limited to books only.