This is a popular myth that is perpetrated by people who have absolutely no idea what they are talking about.
The fact is that most people who buy iPods already have a decent collection of music on CD. When I bought my iPod, I already had thousands of songs to load on it from my CD collection.
In fact, the iPod has already saved me tons of money and has paid for itself many times over. This is because I no longer have to buy an entire album to get just a couple songs that I like.
When I ripped my CD collection, I ended up with over 25,000 tracks in my iTunes. Want to guess how much of that music ended up on my iPod? About 7,000 tracks. That means that I basically wasted my money on the other 18,000 tracks I had to buy to get the 7,000 I really want.
So taking your logic to the extreme by assuming that over time, I would "fill" my iPod with 10,000 iTunes-purchased tunes for $10,000, that would be the equivalent for me of purchasing some $25,000 worth of CDs.
It’s kind of sad all the great music people will miss by only getting the 1 to 3 singles on each album. I can say, a lot of the time, they aren’t the best.