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For what it's worth, in my experience dealing with corporate types, when people who should "know better" do things that even the rankest amateur would see as a huge mistake before-the-fact, there's usually another agenda playing in the background. And that agenda usually has something to do with making more margin than retail alone allows. Perhaps this is a devilishly clever ruse to drive Guitar Hero sales in the light of a failing CD-distribution industry — and bring old-timers to a younger audience (and subsequently sales of older catalogs on iTunes). After all GH is on the upswing and CD is going down. Once could think of the under $9 dollar price as an easy enticement to buy what amounts to a demo — and if you want to hear the real thing, go buy Guitar Hero (I wonder who leaked that information). Considering the business savvy that Litigious Lars and Metallica have displayed over the years, I wouldn't be surprised — although I'm not sure that crediting them with this much Machiavellian intelligence might be giving far more credit than is due.
On the plus side, it is a remarkable phenomenon that fans are savvy enough about music production these days to be off-put by a bad example of it. Demanding their money back or asking for a remix, as many have, should send a very loud, highly compressed message to the remaining record labels — if any have ears left to hear it. I think this also lays a great foundation for those in a position to act on this information (such a people who know how to make good records) to capitalize on it and build a new music industry based on a very old business model: Find a need and fill it. Seems like the public isn't done listening to music and wants it to sound good. After all, tons of distortion pumping into your iPod earbuds can't be a good experience.
As far as laying blame is concerned, I would imagine that the edict to squash the record more than likely came from executives as opposed to people who actually know how to make records. After all, a band looking to make a comeback is at the mercy of those who think they know what will drive sales.
Perhaps the music distributors of the future will be people who made great records in the past — and won't allow tin-eared business majors fresh out school, who's sole qualification for being in A&R was listening to their daddy's record collection, to dictate policy when it comes to music production.
One way or another, I think this is a very positive sign for those who've wondered if there's still a market for good music.
-B-
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Whenever someone asks the question, "Why don't they..." the answer is invariably, "Money."
You're groovy, man. 
Trumpet rock lives!
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