The correct answer is: It's a shame that the books' covers were all torn and tattered.
An apostrophe is used after the "s" at the end of a plural noun to show possession.
Apostrophes have two basic functions; on the one hand, they show possession. On the other hand, indicate letters have been removed to form a contraction.
In this case, the function of the apostrophe is the first one explained. You use an apostrophe + S ('s) to show that one person/thing owns or is a member of something.