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It likely will not change due to abuse. The current family sharing already gets abused and opening it up will only support people renting their libraries.
A workaround is that you go in offline mode, then one person can use your library in online mode.
Keep in mind that family sharing is optional for publishers and that they can revoke it any moment, like the Dark Souls 3 devs did not too long ago. Opening it up and costing them money will enhance the chances that they pull out of it.
The comparison with physical discs is useless. You never were actually allowed to lend the games to your friends, it simply could not be enforced. With digital, it *can* be enforced. The EULA's never changed, you ever only actually owned the disc/cartidge/floppy.
If Steam would follow your idea I could simply share my library with someone who does't own "multiplayer game X" and then I can play it with them even though my license only allows for 1 person to play that game at any given time.
That's not exactly fair towards the developers.
They can limit the number of registered-shared-PC within a month,
then people can't rent their account to many different customers.
Or allow like up-to 3 different games to run at the same time.
But apparently that do no good to the business and cause too much trouble, so won't happen.
I don't understand, everyone can freely share owned physical products to whoever they like, why are games so different.
Even other entertainments like music/movie discs are allowed to be shared within a limited degree.
Well a lot of ideas are shot down because they only benefit one party, or harm another. Steam also has to address the concerns of two types of customers. Retail customer like us. And publisher/developer customers. And anything that would make it unnecessary to buy a game is probably not a good selling point to developers and publishers.
Physical copies are limited by proximity. Steam accounts are not. I mean that's just one thing off the top of my head. There are differences between digital and physical and those differences can have huge consequences.
However, family sharing as it is implemented now is basically the same as account sharing, which can't be prevented anyway. As such, it's comparatively easy to sell to publishers.
Telling publishers "you sell one license, and then everyone in a household can use it with very few restrictions" is a pretty hard sell.
As Brockenstein mentions, these ideas all stem from the benefits for consumers. Where are the benefits for the developers/publishers?
The best idea I've seen in this was from Radene, who suggested crossplay (you play one game of mylibrary, I play one of yours).
You don't buy an actual physical product. You buy a personal license to access the software. That was now and was also in the past. As said, in the past they couldn't enforce it.
There are reasons why Netflix & co want to cut down on their familysharing in the digital age. It costs money.
Keep in mind that even GoG with its DRM free games has mentioned that they TRUST their customers to not share the games...
Especially when in reality "household" means anyone the user feels like and would be extremely difficult to enforce any restrictions about who a user shares with, even with strict language in the terms.
Because this was the condition that nearly all of the publishers, especially the major ones, required of Steam so they would agree to add their games to the Family Share service.
Family Share has to be enabled by the game publisher in their Steam settings, Steam cant force any publisher to add their games to Family Share.
And most publishers demanded heavy restrictions in how their games could be shared.
In the end its about money. They want users to buy the games they want, not play them for free via Family Sharing.
Contact Blizzard, Ubisoft, CDPR, EA, Epic who do not have family sharing and ask why you are been limited on their platforms.
Secondly multiple machines are for your use only with your account.
Your inability to see the logic doesn't mean it doesn't exist.
No we didn't at all because it's how it WOULD work. We're pointing out how it would manifest.
If they included another game to play that would mean it would open up for ALL games.
And they simply aren't going to allow that (Not Valve, but the IP owners).
As to why it is limiting, it is simple - because it could be fleeced and abused if it were as you claimed, same as so many suggestions.
IP owners simply woulnd';t let Valve do it.
It ought to be changed to make it work more like how a family would share physical game media -- each game is separate, and not glued to all other games.
Not to mention that this isn't even airtight. There are multiple ways to get around this (and make your games work more like they would if they were physical media), including using Steam in offline mode, running the game without Steam, or buying every single game on a different Steam account. So all this restriction is doing for actual families is basically just making things a little more annoying.
To be able to play different games in the same collection at the same time, I suggest getting your games in some form that isn't bound to some sort of exclusive-use user account as DRM. Naturally, DRM-free games would work in this regard and would give you more value for your purchase.