It's kind of funny that the article Slashdot links to says, "More blank CDs are now sold in New Zealand than pre-recorded discs." Yet, Sony, the music giant, which includes Columbia and Epic among its labels, makes blank CDs.
I copy my own CDs into different mixes all the time. I never even knew anyone objected to it. Tough taters, I just made my own law (indexual fiat).
I've read that Apple isn't succeeding at all. Walmart just undercut everyone with 88 cents a song download. It's a loss-leader for everyone at the moment, hoping to spur sales of mp3 players and/or just drive traffic to their online stores where they hope to make up the lost song revenue on items with a reasonable margin.