They should be happy. Google exited their market. Now they can capture all the customers with their own platform and keep all the money.
I don't think Danish musicians had any choice in this decision.
But Danish musicians are still free to host their own music on YouTube, this argument affects only the unlicensed use of music in third party videos.
In other words, PeerTube doesn't provide the same benefits to musicians (audience size, recommendations discovery, ad payouts) that Youtube has.
The trigger for the disagreement between Koda musicians and Google is about money payments and not about storage & bandwidth costs. PeerTube in its current incarnation is not relevant for Koda.
Yes, let's make music rely on the glorious ad industry as well. /s
320kbps (which is ~Spotify 'extreme') vs FLAC is a different story, you do need some reasonable (read at least a $30 soundmagic E10 in-ear, not some wunderbar looking designer latest fashion trend on-ear for $200+) equipment and some training to spot that.
EDIT Also doesn't tackle the problem that most people hear music, not see it, so 480p vs 1080p for MUSIC isn't a deal breaker now, is it?
Like, wasn't MP3 encoded at 320kbps designed to sound like a CD, while still being compressed? If it's still possible to tell 320 from FLAC in enough circumstances, then is that a failing of 320? If so, why stop at 320? Why wouldn't there be a bitrate somewhere between 320 and uncompressed that makes it impossible for practical purposes to tell the difference between lossy and lossless?
MP3 does the same to sound that jpg does to colour: those similar enough become one. And it also cuts off the "inaudible" sounds. If you open a spectogram, 320 still cuts at 20khz, whereas most CDs have until 21-22khz - because there are people out there who hear those sounds. (There are some "ultrasonic" cat & mammal scare away devices, which I hear, and they are literally painful to me.)
But answering your question: no, the goal was to have a good enough, but massively smaller file. The goal was never not to be possible to tell them apart.
FLAC compresses a CD to roughly half of it's size - that's already a big win.