If you have a back up to Time Capsule or some other drive try:
1.) Go to System Preferences on your computer. Select iCloud and then next to iCloud Drive select options. Scroll down until you see iBooks and deselect it. This will prevent iBooks on your computer from syncing with iCloud. BUT first make sure that you have a back up of your books because I think this will delete your iCloud books.
2.) On your computer, go to Users/Library/Containers and find the folder "com.apple.BKAgentService" and the folder "com.apple.iBooksX." Copy these two folders to your desktop just in case something goes wrong. It might help to restart your computer at this point.
3.) Restore from your backup the above two folders "com.apple.BKAgentService" and the folder "com.apple.iBooksX."
4.) Open iBooks. Sign out of your account and sign back in. Your iBooks should be back on your computer and resynced through iTunes. You might have to close iTunes and reopen it and go to your devices and then "Summary" then "Books" to make sure they are all appearing there.
If you get an error message when trying to open a book in iBooks that it can't be found, or all your books begin to disappear again when reopening iBooks on your computer, wait and let the app finish what it is doing. Be patient. I found that it stalled my computer (and my internet connection out for some time), all my books disappeared before my eyes (which was alarming!), but then iBooks restored them as I clicked through my collections. They were not in the manual order I had originally stored them in my collections though. To fix this, I closed the program and copied the folder com.appl.iBooksX over again. When I reopened the app, everything was in place again. Apparently, the folder "com.apple.BKAgentService" contains your books, whereas the folder "com.apple.iBooksX" tells iBooks on your computer where you have them and in what order they are in your collections. Once you have ensured that everything is in working order, you can delete the folders you put on the desktop. Doing this should then restore everything as it was to your device.
A final note: I had synced my updated iPad and experienced what you did--all my books had been deleted and moved to the cloud, and each book had a cloud icon with a downward pointing blue arrow. As I have over 2000+ books, it would take some effort to redownload each one individually. And, my resyncing them as described above put them all out of order in my collections. To fix this, I copied an older back up of my iPad into the User/MobileSync folder (I moved the newer one to my desktop just in case something went wrong) and I restored the device from the older back up. All my books then copied back over as they were before to the device. You should not have to do this step though unless like me, you have thousands of books that you don't want to take the time and effort to reorganize manually. I should mention here that I backup to my computer rather than iCloud specifically so that if anything goes wrong I have the backups on hand.