I used CDBaby once, and I can't say I completely disagree with you.
The album art was horrible. It looked like the scanner had a years worth of dust and a big smug on it. When I contacted CDBaby, I got a response that basically blamed me for their bad scan.
It seems that since Derek's departure (which really took place a while before he officially announced it), the focus of the company has shifted. Under Derek's rein, CDBaby was all about what's the best for the artist. Now it seems to be what's best for CDBaby. A great example of this is the download cards. People have been complaining for quite some time that they don't have the ability to give out iTunes download cards because they can't get promo numbers. CDBaby's solution was to create their own download cards for their own site. Nevermind the fact that this is not what people asked for. They completely disregard and try to downplay the importance of the roll that iTunes plays for any current artist. You might get some hardcore indie fans that will download from their site, but most people want to use iTunes for digital downloads.
Once upon a time Derek worked out a deal so that CDBaby artists could sell through Tower Records. This was a big deal at the time. I don't think we'll see these kinds of deals come along anytime in the near future. It's a shame, really.