"Regarding the "by the book rules for spellbooks": I suppose if you really want to run it that way, nobody can stop you, but I think it's a clear case of adhering to the letter of the rules rather than their spirit, since context (every version of the game before and since) makes it clear that this is a simple misinterpretation. I'd never make run a M-U in a game with that rule in effect, because I'd obviously be getting screwed."
1. B/X was the first version of D&D I played. I picked up Moldvay's basic set when I was 10 years old and played that for five years before I picked up the AD&D PHB. I don't see how using the B/X rulebooks as written could possibly be a misinterpretation. I would contend that anyone that doesn't use this rule is house ruling their B/X game. Which is fine. I house rule some aspects of my game as well.
2. I don't think the rule as written obviously screws the magic-user. Sure it limits his versatility but page X11 says, "Magic-users and elves must be taught their new spells… Either the player or the DM may choose any new spells." I usually run this as various high level magic-users have their own specific spellbooks. Some will be famous for having certain spells such as the witch in the swamp that can communicate with otherworldly beings (Contact Higher Plane) or the Ice Mage that lives in the castle on top of a glacier (Wall of Ice). When a PC magic-user wants to learn a new spell they can do some research about who has the desired spell already in their spellbook and can then go an approach that magic-user about learning the spell from them. This allows players to customize their magic-user exactly the way they want and gives numerous adventure and roleplaying opportunities.
I agree that some players will dislike the limitations placed upon magic-users by using this rule. That's fine. I don't like playing clerics. Everyone has their own preferences. However, I like the rule and plan to continue to use it in my B/X games.
What do you think? Does the rule limit magic-users and elves too much?