Let's say some sort of centralized audio streaming service starts up. I guess I don't need my 10 gigs of mp3s anymore, so what do I do with that space?
It's convenient to have my music (that I rip from CDs I legally own) on my hard drive. I can listen to what I want, when I want. Disk space (hard drive or CD) is cheap and getting cheaper. Bandwidth is not. Until these costs flip-flop, storing music locally will be more efficient.
And how is Napster inefficient? I log on, run a search for some song, if anybody has it I get some results. I pick the person with the fastest connection and have my music a couple minutes later. If I like it, I keep it and probably buy the CD. If I don't, I delete it and never have to deal with the trouble of returning a CD. This beats the hell out of putting pants on, leaving my apartment, trying to figure out where I left my car, etc.
Furthermore, what kind of a selection would I have with your universal music service? I don't believe for a second that a universal music service would carry all of what I listen to. On the other hand, it could very well offer everything. Ever. For example, I'm listening to the Parasite Eve Remixes album, which I don't believe is sold outside of Japan -- I can't even find it on cdnow Japan. The possibility of bringing together artists from everywhere in the world, big and small alike, would have disastrous consequences for the one-hit wonder groups. Putting Britney Spears on the same playing field as Aphex Twin, well, that would be interesting =)
Last bit: what's to stop people from recording off such a service? Anyone with even a slow DSL or cable modem can handle a 128kpbs mp3 stream. It's trivial to make a flawless copy, cut out the ads, remove any watermarks (somebody will hack SDMI, we all know it) and toss it around. Want interviews, cover art, etc.? Search the web. It's already out there if you know where to look.