This is true to a point. A CD holds around 750 MB of data. With phones/ipods generally having between 16 and 32 GB of storage, you would only be able to store about 20 to 40 albums. This is not all that much. Let me know when amazon offers 2 TB of space in their cloud for free.
Granted, this does not take into account using loss less for home use and mp3s for portable use.
Actually the average album takes up around 300 MB if you use compressed lossless (like flac files) so you could probably get around 100 albums on a 32 GB device. That's still not a lot for a portable device I agree. I have a little over 300 CDs that I've backed up at home and it's just under a tenth of a TB. I have started using lossless at home and mp3s in my portable. It's not too bad now that I have a system down.
"Always go swimming with a buddy, work real hard and always study."
--Hulk Hogan and the Wrestling Boot Band
I, like others have mentioned, like having the physical CD as a backup should any of my electronic devices die. Occasionally I will buy songs on iTunes if I just want a "hot new single" or some other song I'd be embarrassed to own the CD of. Or, for example, when I watched Gentlemen Broncos and decided I needed the song "In The Year 2525" by Zager and Evans but didn't want to bother buying the entire soundtrack:
[ame="http://www.youtube.com/watch?v=izQB2-Kmiic"]Zager And Evans - In The Year 2525 - YouTube[/ame]
I have had good luck buying used CDs at Half Price Books in West Des Moines (near Fareway, across the street from Guitar Center). Their inventory seems to cycle quite a bit, and I find a lot of good CDs from the past decade and beyond. On my last visit I left with:
Interpol - Turn on the Bright Lights
The Shins - Chutes Too Narrow
Arcade Fire - Funeral
Spoon - Ga Ga Ga Ga Ga
All for $6-7. Never had any issues with unplayable discs from them. They also have quite a selection of vinyl, mostly older stuff.
Ames also has a nifty little record/coffee shop downtown called Vinyl Cafe. Just around the corner from the cupcake place, below street level.
For car music I rip all my discs to WMA Lossless, copy it to a 1TB USB Drive formatted to FAT32, and plug that into the USB port in our Ford Fusion. Microsoft Sync indexes everything so you can manually search for artist/album/song/genre using the radio controls or voice command. It'll also read the iTunes files that are not DRM protected (pretty much all iTunes files are free of that crap these days). I probably have at least 500 albums on there with plenty of room for more.
"Would you rather have Niang for 4 years or Nerlens Noel for 1?" --Fran Frashcilla
"I hate it when anything good happens to a Hawkeye fan." --My wife.
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