I agree that the majority of listeners in the old days had lousy playback equipment. I know I started recording songs off shortwave(!) on a sanyo cassette deck (mono of course) and listened to those a lot. My first exposure to even reasonable good stuff was a Sony HSt99 cassette deck with AR bookshelf speakers.

Your point actually supports the thesis expressed in that para,
"As long as we have faith in the power of music to move the human soul, the attempt to reproduce music in the home will be a noble endeavor,.."
so compressed downloads may not matter so much.
There are other differences of course between the past and today, pointed out in that para, such as the other diversions available (visual stimulation & internet/gaming mainly) that folks growing up before the 90's did not have. So even though I began my teen years with a fairlyy crappy system, the aspiration for better playback was stronger, and listening to musc was always cool for me. Is it cool now...just listening to music? or do kids today need to play a videogame while listening to music? I'm not sure. Again, one can but have faith in the power of music, as the bard said, to soothe the savage beast...and so on.
-akhilesh