128kbps is supposedly "near-CD" quality. Most people won't be able to tell the difference between that and a proper CD.
It's great for the companies to sell music at a low bitrate because the files are small, and it saves on bandwidth and storage. It's good for the customer, because the files are small and don't take that long to download.
These 128kbps files are perfect when you are using your iPod with its standard crappy white earphones. When you decide that you wanna actually know what music is supposed to sound like, and you invest in some
Grado SR-60's or
Shure E3c's, you'll understand just how crappy that 128kbps file sounds. Then you'll have to go out, buy the CD and rip it to a lossless format (e.g.
Flac) or a higher bitrate.
I use a minimum of 192kbps VBR when ripping to mp3, anything less and i start to tell the difference. Which is why i'll never buy from a online store.
Oh that and the DRM of course.