I've used it on occasion. Here are my thoughts on the matter:
1. It's a pretty good source for OOP items in the catalog. If you can't find these records used or through other sources, assuming you really want the record, then SQ is ultimately irrelevant.
2. 320 kbps MP3 is probably not ideal for audiophile purposes, but DG cannot cater to the audiophile community by using something like FLAC - realistically speaking. DG isn't an audiophile label even within the classical world. Also, MP3 is still widely supported - unlike FLAC (i.a.) - so it makes sense to sell in such a way that the most possible number of consumers will be able to use your product. In my view, on most systems, 320 kbps is adequate for classical listening. It's about as low a bitrate as a serious classical fan could tolerate, but it's still more tolerable than 128 or even 256 kbps.
3. Online music downloads, in my opinion, DG Web Shop included, are great for trying music or impulse buys of music you're not entirely sure you'll want. By the time you buy from Amazon or Arkiv, you're out the purchase price (usually a few dollars more) and shipping. If you don't know if you're going to like the composer or composition, then a cheap, right-at-hand source for the material is nice.
So, for what I've bought, I like the DG service. It gives me access to records I couldn't buy in CD format - even if I wanted to - without great trouble, and in some cases, hefty price tags. The SQ is tolerable, though it could be better. All in all, it's not a bad service, but I wouldn't want to have it replace CDs.