I listen to portable music as much as I do my system because I'm on the road so much - to be honest, I think this represents the old adage that being a music lover doesn't necessitate being an audiophile. Two different things. I bet most of the best musicians/performers from ANY era did not start out as audiophiles at all. Most probably still aren't.
I use my portable media devices to play back much higher audio quality than 128k mp3, and I gather more and more people do. Gotta start somewhere though. It doesn't sound bad at all, I prefer it to any FM radio. And it is convenient. Hard to argue against that.