I'm not sure your analogy is applicable. The public library is a storehouse to be used by lots of people. Your Media Center library is for you alone.
In our house we have multiple libraries on multiple machines, the libraries are open
for anyone in the house to browse. That's not an uncommon scenario, especially
among the younger generation.
We have no central file server for media (also not an uncommon scenario for most houses).
We also have different tastes for music. Different libraries are a natural way to split them.
However our music tastes may over lap for certain areas, hence it's nice to browse
other peoples music.
Some people I'm sure even have large enough collections that splitting it up into multiple libraries
make it easier to categorise them (despite Media Centers excellent abilities)
We could achieve this by tagging the owner of the music, but that could get
messy, plus put a larger strain on the slower machines as they would need
to handle having the entire libraries loaded each time,
which would amount to 300,000 files or more, not something older machines
cope so well with.