But, $258.00 for a download?? THAT would have stopped me cold. At least this way, I actually got something for my money.
I'm not sure I follow that logic. The value isn't in the physical medium. After all, you can get a box of 15 blank CD-Rs for about $7.50, and a ream of paper for about the same. What's worth a quarter of a grand is the actual music and information. The only difference is where and how it's stored.
It isn't about the logic. Here it really is about feeling: our internal price points are set by experience. Downloads are generally inexpensive. In publishing (as you know), they can be crazily less expensive than the hard copy, though you're right, a major publisher isn't putting much money into paper and ink per book. It's just what we're used to. So a quarter of a grand for a data transmission just would've felt wrong to a lot of people.
Very little of the price is for the making of the plastic discs, of course. But shelling that amount of money out for a bunch of CDs feels ok, since we "know" what a big set of CDs or DVDs goes for.