I'd disagree also on your statement of "Napster and the Internet mean that no one other than the person that initially purchased the CD had to pay" to differentiate that from someone making copies of a CD that they purchased for someone else. They're both the same thing, but Napster is on a wider scale.
I used Napster. I used it to research groups I'd heard of but couldn't hear due to the fact that they don't get airplay. I used it to download songs that aren't available any more because they aren't released. I also used it to download songs I already owned, but wanted on the computer in an easy to use format.
Then again, I'm in the minority on that one. None of my downloads were top 40 hits. None of them were (to my knowledge) available in any form that I could purchase (at least that I kept - I 'discarded' several bands because... well, they were shit).
Napster deeply expanded my knowledge of folk. I will NOT buy something unless I hear it first after being burned MANY times by getting a CD with one good track and 10 horrible ones - $20 is a bit steep for a single. I've severely curtailed my exploring new music because of this. There simply isn't a reliable source for folk music listening outside internet downloads and stations, and with Napster dead, not much available on the other services, and a slow and unreliable connection that makes Net Radio (which is also threatened) logistically unlikely, it's not likely I'll be buying much new music.