How Important is Bit Rate?
The New York Times ask this question in Where's the Other Half of Your Music File? While data storage for drives in computer and portable music players has zoomed over the past decade, the digitization sampling rate bit rate for music has been generally steady at 128 KB/s.
A few niche services for hifi aficionados have developed like MusicGiants, which digitizes files in a lossless format that results in 25MB files, up to 10 times the size of typical MP3 files. But such services have seen limited adoption.
It turns out 128 KB/s is simply "good enough." Higher bit rates don't deliver a proportional increase in sound quality. Furthermore, the increase in fidelity is typically undetectable unless a user's full system (headphones, PC speaker, car speakers, portable music player, etc.) is high-end and tuned for such files.
You said it, higher bit rate doesn’t matter unless you have a quality system to enjoy the music on. That said, if you’ve ever listened to a 128 kbps music file with premium AV gear, it’s garbage. There’s an audience for uncompressed downloadable music so MusicGiants will stick around.
There is a reason that music professional pay up to 3.00 for a download at 320kbps. It’s not because we want to fill our harddrives with large songs files, it’s because with a highly responsive playback system, the difference can be heard. lower compression and higher quality with added warmth to the songs is the reason why it’s better to get music at a higher bitrate.