A lot of libraries here in blighty have video games, and they pretty much all have movies. I like it personally - I don't play console games on the whole, so I don't rent them, but it gets people in. My local library has a pretty good selection; the library in the town where I work has a fantastic movie selection, along with a reasonable number of games (it's worth noting that CDs, DVDs and games have to be rented, they aren't free).
To my mind libraries aren't about being educational, they are a public service. Over here it seems like less and less people are reading, and some (many?) libraries are struggling so anything that gets people in is a good thing.