I think the idea to have this show is really cool, and I listened to part of this. But it took me a while to understand the question, and I'm still not sure if I did. This issue was perhaps vaguely formulated.
Like one of the early callers, I first thought that you were talking about the sample library market being saturated, but it was more about "library music" saturation, which confused me because I don't think of "library music" as a genre (or a collection of genres), but simply as another medium for artistic expression. So in this sense there is nothing to saturate, since sample libraries are just tools, however many people choose to use them or not use them.
So I slowly gathered that the question was more along the lines of whether or not the number of people using sample libraries specifically for the purpose of selling audio content to other media such as film, TV, games etc. has become sufficiently large as to have saturated the demand for such services. My confusion was further compounded by the question of using looped content, which would seem to be a whole other discussion in and of itself...
...So FWIW, in short, I think the show idea is terrific, but that the subject under discussion could have been laid out more clearly in this episode.