They aren't giving people's shit away for free. When the NEL was active, all it did was allow a person to check out a book for 14 days. You had to read it on the Internet Archive website, or download a copy-protected PDF that expired after 14 days. You could renew again for another 14 days, unless someone else had reserved the copy. Essentially, it worked as an online library.

But further, the vast majority of these books they were making available were out-of-print and/or were academic resources. It was basically JSTOR, but for full textbooks and books published by academic presses, instead of just articles in academic journals. Many of the books were by authors who have long been dead and even those who are alive aren't making any money off them because the publishing contracts for academic authors don't really pay much in the way of residuals. And of course with out-of-print books, it would be non-existent. But that's rarely the point of academic publishing anyway. Academics publish as part of their job at universities. They do get screwed, but IA isn't the one screwing them. It's the universities and university presses that screwed them decades ago, when they wrote the book.

In fact, in a lot of cases, if the author is still alive and working, you can often Google the book title and the author has made their older books available for free on their own website or university web portal. They're not getting paid anyway, so they like to get their work out there so it gets referenced in academic papers and whatnot.

Only some of what IA was making available was fiction, and only some of that was recently published. Most anything available on IA that is recent was not part of the issue. That stuff is uploaded illegally by the public and they're pretty good about taking it down quickly, just as YouTube is when people upload copyrighted material to that website.