Why aren't all books free? (Or why are they?)

The Baen Free Library is another example of a publisher trying to release some books in a free format, then seeing sales on those works increase. Cory Doctorow performed the same experiment years ago, and Tor publishing has entertained a similar experiment.

Many of these experiments have had lead to success stories and increased sales.

So why aren't all books free online yet?

And if there are good reasons not to allow people to read books for free, then why do publishers allow libraries to buy their works?