Hubris in the area of copyright is not new [1] nor novel. It is unfortunate that we (me too) fail to learn from the path trodden by others. There are things about US Copyright law that are quite over the top [2] that should be repealed or fixed [3], but disagreeing with it doesn't it suddenly legal. Back in the day when I did a lot of music licensing I would have copyright discussions over a beer with people. After a while I figured that this was "cocktail party licensing." In the morning you'll wake up with a hangover in bed with your attorney.
This is a district court case (i.e. one that doesn't set precedent) where the record companies liked the result, which also effectively bankrupted the defendant. One of the media companies then bought the defendant, causing the case to not be appealed.
It's not obvious they would have lost on appeal. The district court largely ignored the Sony Betamax case and what MP3.com was doing was effectively operating tape recorder with a longer wire on it.
MP3.com made mechanical copies without permission. Pretty black & white. Vivendi Universal acquired the company for $372 million in 2002 mostly because they were interested in moving forward with digital distribution. The MP3.com engineering team then went on to build PressPlay with Sony and Universal, which was later sold to Roxio and renamed Napster. I'd be happy to answer any questions about MP3.com.
1. https://en.wikipedia.org/wiki/UMG_Recordings,_Inc._v._MP3.co....
2. https://en.wikipedia.org/wiki/Copyright_Term_Extension_Act
3. https://www.amazon.com/How-Fix-Copyright-William-Patry/dp/01...