Could a significant factor in the woes of the music industry be the result of two factors: "good enough" and "lasts a lifetime"?
In the past, the music industry could release music in newer and better formats that prompted many to replace the music they had already bought in a newer and better format. Wax cylinder was replaced by shallac disc, which was replaced by the LP and 45, which were then rivaled and then existed alongside the 8-track tape and the cassette, and then finally the CD which replaced them all. This resulted in repeated sales for the same music and recurring money stream for the record industry. I have re-bought some musical albums a number of times because wear and tear through regular use (with one album I bought it once on cassette which I wore out, two times on LP [one for playing and the other as a backup and eventual replacement], and then once on CD).
Then, CD was introduced and it was good enough for majority of listeners, who felt no need to upgrade to a better format. Considering that for many people the lower sound quality of lossy compressed musical formats (including, but not limited to, MP3, AAC, WMA, and Ogg Vorbis) are fine for day to day use, I think it works against the introduction of a successor to CD.
Lasts Of Lifetime:
This goes hand in hand with the above. Until CD was introduced, each music format wore out over time as you used it, prompting you to replace your worn-out copy with a new copy. I remember reading/hearing that one of the reasons that Pink Floyd's "Dark Side Of The Moon" stayed on the Billboard Chart so long (per Wikipedia it stayed on the Billboard Chart for 741 weeks) is that people regularly rebought the album as their copies wore out.
Now, you buy the album one time and that's it. I still have my original CDs (the ones I bought with my first CD player over 25 years ago) and they still play as well today as they did the day I bought them. In addition, the non-physical formats don't need replacement since there is nothing to wear out.
To sum it up, I think the days of people buying same music over and over again are over for a majority of people. Overall, it seems that CD is good enough.