Many ways to accomplish this. The reader needs to be granted a unique decrypt key upon purchase. The publisher might produce the key and payload (encrypted book) for each user at payment time. Or via some other flow. Lots of room for implementation.

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If we need to produce a decryption key from a server, then we might as well sell direct though the author's website and bypass nostr entirely.

You're ignoring the network/marketplace effect that a library has. You can get recommended books, browse and buy on the spot.

Like in the real world, sellers are incentivized to show their wares in a high traffic zone.

I am completely aware of the effect that it has, but we're talking about the mechanism of selling books on nostr.