Add my name to the list of people who want something tangible, and at CD quality (or LP quality) and not MP3 quality. They have print-on-demand books, why can't they have burn-on-demand CDs? You find the music you want online, and they burn you a CD with CD quality music, print out the album art, and mail it to you. You buy your own jewel box and assemble. Voila! I wonder why that business model couldn't work?

Better yet, license people to do that for a small mark-up. Then you could have a record "shop" with knowledgeable people who can help you decide what you want. Maybe there just aren't enough potential customers for the "shop" idea though. But there is a huge amount of back catalog material that is currently inaccessible that connoisseurs would want -- fans of old jazz, folk, blues, old classical recordings (Carouso, e.g.), dropped-off-the-radar rock and pop artists -- the people holding copyrights on those items could make a little income, and the people who want the music could be very happy.