the whole issue is that most people wont notice the quality increse, a pair of ibuds combined with the built in dac and amp dont have the quality to make that distiction,
as for the DRM, most people dont share their music and have 1 or 2 ipods at home with 1-2 computers with itunes, so they dont knock in to the DRM restrictions,
now, EMI wants to keep using DRM becuase it allows them to control music distribution, and apple wants people to buy protected tracks off itunes becuase they only function on a Ipod, and when that ipod runs out of steam, you either buy another ipod, or all your bought music goes down the drain, well, unless you start burning all your 128kbit music to CD and rerip them in EAC, which most people wont bother to,