I don't think I know anyone that rips music from the net instead of buying the disc. I am a self-confessed collector. I certainly like to hold the product, not just select it via a menu (maybe this is something I will have to overcome if I got a music server).
On the rare occassion that I have used music from the net it has been to preview prior to purchase (most web vendors provide some facilty with RealPlayer or MP3).
Therefore, I can only believe that CD sales are down because:-

a) they are still and have always been seriously over-priced...the re-issues being the worst.
Just see what price a Beatles CD costs and try telling me that it's still studio time, producers, engineers, marketing etc that have to be paid for. I simply refuse to buy until I see the re-issue titles I want in a sale.
New releases I get from the net and never pay more that �9 inc postage. Arguably still expensive, but, better than the �13-14 high street price.

b) the current music/pop industry has completely lost its way. I find it such an insult that it is all so blatently manufactured. I know it's not a new phenomenon, but, they even make TV shows out of competitions about how it's all done. If you win, you get a contract and hey-presto you're at the top of the charts for the next year.
The result of this is that new real music, made by real singers/songwriters and real musicians is becoming more scarce. What follows is that we survive with lots more old material and re-issues than we would otherwise like. Maybe the big five know this and realise that the non-pop audience (quite possibly the majority of this forum)is the one that buys DVD-A and SACD, hence the lack of decent new material in new format and high levels of old at this time.

Maybe I'm just getting older !!

This is what makes the format war/debate all the more irritating (Trying to make my mild rant at least appear vagely on topic)

Rgds,
Nick