They had encoded a bunch of CDs, and you could download it after saying you had bought it yourself.

Not quite true. MyMP3.com required you to put in the music disc into your drive and it scanned the same info used for CDDB queries. If it matched a CD they had, you were granted straming access to it. Nowhere did MyMP3 ever allow you to download the music. Of course stream rippers exist to counter that,