I think it comes down to the fact that most people listen to mp3's through cheap headphones, pc speakers or a standard car stereo while they are otherwise occupied. Driving, running, working out. The caliber of speakers/headphones they have tends to limit playback quality regardless. Lossless is definitely a concern if you are going to be passively listening while seated or reading. I'd say lossless is a waste of time if it's not given a decent playback system. IE: no apple earbuds.

I decided to use a lossless format on a PC as a music server. That way, I can eq in the digital domain if needed. I can also eliminate a lot of variables in terms of CD player. I was listening to a FLAC of Allison Krauss, and the detail I have heard coming from a $3K cd player is all there.