Hmmm... well, I applaud you for your enthusiasm as well as your insights and delineation between compressed dynamic range (level compression) and digital compression. I think you are dead-on in terms of the 'economies of scale' of memory (especially on the portable front where SSHD'd solve a longe-standing issue (battery energy density)); there really is no 'need' to compress (frankly) to anything of a higher compression rate than what FLAC would achieve. Frankly, .wav would suffice given the onslaught of cheap memory, but one thing that FLAC has over .wav is that it adheres to the metadata tagging standard(s) whereas .wav really doesn't. So, it would seem given the points that you have made and the tagging / album art support that FLAC provides, the future looks bright.

However...

When you have artists who insist on partaking of the loudness war...and essentially destroying - to varying degrees - any semblance of fidelity by means or strident level compression, then in the ears of the typical consumer, FLAC would seem to have no real - check that - immediately noticeable improvement in fidelity over the lossy formats. I say this because, well, let's face it - most of the music that generates revenue has dynamic range nowhere near something like that of Holst's "The Planets". As such, when you compare a heavily compressed (level...EQ etc) track...as mastered by those who are willing (all too willing) to not only participate in but fully embrace the loudness war...in a lossy format versus a lossless format, then I would wager that most consumers would say "but...I really can;t hear a difference between the two versions...tell me why (again) I should download the bigger file...especially if I have to pay more...when in fact, it sounds no better than the lossy (or simply 'mp3') version".

You can't blame them for this...because truly, if it sounds like crap after mastering, it will still sound like crap in an uncompressed version. Therein lies the problem. On the other hand, classical / operatic content has and will likely continue to embrace formats such as FLAC because fundamentally, the market there is (more often than not) targeted to those who value the aesthetics of the music and appreciate the art inherent within.

Like any product, there truly has to be a demand, and for most pop / rock artists (especially those beholden to a 'big' label) the label calls the shots. This is why I applaud artists like Neil Young (and while he may get some of the technical matters wrong when he discusses the topic, it's forgivable because his cause is just, and his heart in the right place). Frankly, the rise of Indie 'labels' and Artists who can establish and maintain creative content rights for initial and subsequent reissues...they will be the only ones who, it seems to me, are capable of stemming the tide of the loudness war. For those artists, the fidelity of their music will be valued - as a minimum, because they refuse to level compress (unless perhaps for effect) and understand what music really is.

Who knows?