After all this critical and great feedback, I don't see why we shouldn't offer researchers and patrons MP3 files for listening purposes only.Thesefiles would be accessible via a media player available on a computer or MP3 player in-house only, eliminating copyright infringement issues as we would be using these for educational purposes only and not distributing in any way.
For now, I'm still thinking of using a lossy format, since the originals are flat unprocessed transfer WAV files. WAV files are backed up, and listening formats can be changed easily in-house.