Chris: Again, that case was related to music, in which consumers are permitted by AHRA to make copies for personal use. The court found that the law didn’t permit a third party to make the copies for the consumer’s personal use. To your point, [for material other than music,] copying for yourself is a civil tort (you can be sued) as long as you don’t go nuts, whereas copying for material gain is a Federal crime. (17 USC 506)

[By "go nuts" I mean copying more than $1000 worth in any 180-day period; that's a Federal crime even when copying for personal use.]

Frank: Wal-Mart and Vudu are providing that service with the explicit authorization of the copyright holders. From Vudu’s FAQ: “The list of movies available for Disc-to-Digital conversion is comprised of titles that have been legally cleared for digital distribution from studios participating in the UltraViolet program. We expect the number of titles available for Disc-to-Digital conversion to grow over time.”
http://www.vudu.com/disc_to_digital.html

Again… there’s nothing particularly consistent about law. Music has a special exemption allowing personal recording, in AHRA. In the 2000 Rio case, this was extended to permit simple copying (as opposed to re-recording) of existing recorded music files — the term “space-shifting” is often used for that kind of copying — although that ruling is technically limited to the domain of the Ninth Circuit. In the 1984 Betamax case, the Supreme Court indicated that it probably was legal for consumers to record free, off-the air, broadcast TV programs for the purpose of watching them at a more convenient time — usually called “time-shifting”.

In the intervening years, the Federal courts have generally been loathe to extend consumer copyright exemptions to anything else. Consumers, however, seem to imagine all sorts of extended exemptions as it suits them.

In particular this bit in oral arguments before the US Supreme Court, in which Don Verrilli, representing MGM stated: “And let me clarify something I think is unclear from the amicus briefs. The record companies, my clients, have said, for some time now, and it’s been on their Website for some time now, that it’s perfectly lawful to take a CD that you’ve purchased, upload it onto your computer, put it onto your iPod. There is a very, very significant lawful commercial use for that device, going forward.”

See also the 2007 Federal Trade Commission’s response to the Sony/BMG rootkit fiasco.

Going from the US to the civilized world, making copies of commercial music for personal use (ie. ripping a CD) is explicitly legal in Australia, New Zealand. A directive of the European Union allows its member nations to include a specific exemption for personal copying, and most of them have.

Granted, none of this explictly names books, and you’re technically correct that “there is no legal basis” for it, but there’s no legal basis for claiming it’s illegal either.

Again, I must point out: I’m not speaking about what’s ethical nor what’s reasonable. I’m speaking about what’s legal in the US. Laws are often unreasonable and inconsistent, and its futile to try to guess about them. You have to look up the statutory laws and research the case law. There simply is no legal basis (in the US) for what 1dollarscan is doing.

If you believe it might pass as legal, please provide appropriate citations.

MP3.com got slammed down for doing the same thing with music.