[Corby]

but what if the person receiving a lossy or little less lossless files is content with their copy?

Here was my original thought:

"I don't see any problem as long as it was only going to those who would use it only for personal use."

Then I second-thought-ed it:

"In one generation there is already a loss in quality(from Flac to mp3), albeit minute. What if someone they knew was content with a little less-less-lossless?"

I don't know which thought is right.