As english is not my language I had some trouble to follow the article.
From what I understand:
The LoC have old 35mm prints of at least SW and ESB, but in very poor condition (scratches, faded colors). They asked for new prints to Lucasfilm, who proposed the 97 SE "instead". LoC would also like to preserv the 97 SE, indeed, but it was not what they were asking, so they declined the offer.
So the old, poor and unexploitable prints are all the LoC have.
Am I right?