Regardless of whether Napster was itself illegal, it was only popular because no alternative existed which had the blessing of music "owners." Today, the iTunes store is a very popular web-tool that essentially gives users what Napster did, but with the blessing of the music "owners."
Some people who use iTunes own fewer than 1000 songs. In my opinion, in a library of 1000 songs, about 200 are truly enjoyable. However, a typical core library of 200 songs begins to lose its "freshness" after about three months of rotation. Adding songs to that list through iTunes costs $1 a song, so even being very careful and adding only "core" songs, it will cost $198 to gain another three months of "freshness," or $66 per month. Some people will pay this, and enjoy picking the songs. Many will find the cost -- and agony (watch someone sweat over a large, unfamiliar menu) of making 66 individual choices per month -- prohibitive.
Satellite radio (or Internet radio, TV radio, or other digital audio), on the other hand, can be thought of as someone with a library of 250,000 songs, including every new one. The key advantage, however, is in the feedback. If a satellite radio station can be "trained" to know your musical tastes, then it can not only deliver old songs that you are likely to enjoy, but predict which new songs you will also like. In fact, if it can narrow your tastes well enough, you may even be able to receive just a core of 200 good songs, out of a selection of 250,000 possible songs, and this core will automatically update with newly released songs every day, completely updating before any song becomes stale.
In the case of portable music, an iPod is comparable in price to a satellite receiver (it is likely cheaper, but has a shorter life). However, satellite radio costs close to $15 per month, while 66 new songs per month on iTunes costs $65. Furthermore, for the average consumer, no decision-making is required.
Despite my love of iTunes, I think that, within a decade, music-as-content will be stored on central servers and streamed to users, rather than "owned" by individuals.
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