They can't survive as community-funded repositories for books that individuals don't want to own (or for reference books we can't afford to own.) More librarians are telling me (unhappily) that the number one thing they deliver to their patrons is free DVD rentals. That's not a long-term strategy, nor is it particularly an uplifting use of our tax dollars.
This is a topic critically important to us all. The collection, categorization and maintenance (and preservation) of the content we produce is the pursuit of the librarian, archivist and historian. Our libraries have suffered not so much from lack of interest as much as from lack of funding.
I endorse Seth's view that we need to leadership to redirect us back to these resources - and in my view - the funds will follow. Our libraries can return to the destination they have been for centuries.
Digital or not - information needs to be managed and accessible - and libraries are the perfect delivery system both offline and online.