I think Ted had a more optimistic vision than that. More like, go to the library and read whatever you want, but with a meter running so you got charged a microscopic amount per word read. It might come to a couple of bucks equivalent if you spent the whole day reading. At one point (I don't know if he departed from this), you couldn't set your own prices. All paid reading was charged at the same amount per byte. As an author you could freely quote anyone else, like transclude a page of their text into yours. The system tracked the transclusions so the other person would get paid for the part that you quoted, and you'd get paid for your own parts. They basically handwaved the question of unauthorized copying (as opposed to their tracked transclusions), at least for a while, by saying that it wasn't allowed but not explaining how enforcement would work.

I knew the Xanadu tech folks pretty well and hung out with them a fair amount. They were capital-L libertarians with the usual belief that they could squash the real world into their ideological framework. I only met Ted himself a couple of times. I think he was less naive, but I don't know how that fit in.

I remember RMS meeting them and getting a big talk about all the stuff they'd implemented over N years. Afterwards he said he could write the same thing in a few weeks. He wasn't interested in the paid-everything vision though.