> My 1996 Mustang's CD player has a "Compress" button on it, to make listening to highly dynamic music more feasible in a noisy car environment.
I believe _this_ is where the issue mostly originated (well, radio, really). Radio is already massively compressed, and many people were either listening to things in the car, on some tiny little radio in the kitchen, or with awful cheap headphones with their walkman's built-in radio.
All of these weren't great environments to start with, and the dynamic range of radio was tiny given the overall bandwidth available to most FM stations.
So, companies compress, people get used to it, and thus the horror continues.