I'll answer some questions and make some comments, in no particular order.
SACD. Sony's own vapourware version of high resolution audio.
CD audio is 1.4 Mbit (stereo) if you consider 1000000 bits to be 1 Mbit. If Phalkon's calculation is half the right size. 128 kbps is 10:1 and 256 is 5:1.
CD isn't a perfect solution. I think I'd prefer 96 KHz 20-bit just for piece of mind, yet still maintain some flexibility for multiple channels. 192/24 takes up too much space for a consumer format (for now). At that size, a standard DVD would only hold 1/2 an hour of stereo music. At 96/20, we could have several hours of 6 channel music with space left over for extras on the disc or alternate versions, etc. Plus, it would be easier to migrate to the technology, since the current spec calls for all DVD players to be 96/24 compatible anyway. 192 is another story.
Noting that CDs aren't perfect, they're still pretty good. And MP3 can come very close. I wouldn't use any downloaded MP3s for testing. Much of the stuff on the net is crap, regardless of the bit rate. I encode my own, and in fact updated my system specifically for MP3 encoding. I use two drives widely known for their excellent DAE quality. I use several different MP3 codecs, depending on my intentions. I use Fraunhofer HQ 256 CBR for hard to get stuff, and Xing VBR High (up to 320) for speed. However, even though MP3 is a convenience format, I consider 128 kbps from ANY codec to be unacceptable quality (although some are less unacceptable than others). Furthermore, 99% of computer sound cards are also inadequate for testing if you're using the computer speakers or analogue output.
Here's a clue. I belong to a couple of professional audio groups. At one meeting, we ran a CD through a Dolby encoder and digital delay that gave 100% accurate data with enough delay to match the output from the encoder in time. We then subtracted one output from the other. What remained was just the parts that the computer removed. Every person in that room who was experienced in recording was shocked. What we heard was a bunch of subtle subtextures, such as room echos and other audible cues that no experienced recordist would want left out of their carefully crafted mix. In other words, such schemes will never give you an exact copy of your CD.
I'm not sure if I understand you correctly, but...
This of course is unsurprising, especially if you're talking the ultra low 384 kbps 6 channel Dolby. At the standard Dolby rates, stereo takes up all of 128 kbps. As I've said above, MP3 at that rate using any MP3 codec is just unacceptable. I think DD uses up to 192 for stereo, but still... However, regardless of this fact I have not seen a blinded study proving that it would be noticeable even to most trained ears if higher bit rates and proper settings were used. It's definitely irritating knowing that lossy compression algorithms are imperfect, but in real life it may be irrelevant. (Just playing the devil's advocate here.) The whole point is that we are not making archival material with these convenience formats.