I surely remember much of my computer time being from ripping my CDs, borrowing friend's CDs to rip, going to the library (excellent source, really), to rip their CDs, etc.
Napster was all but toast once iTunes was on the scene, but Kaza and Limewire weren't any better in the problem of getting say, a whole album (those were still a thing) perfectly cataloged with metadata - and in high quality. iTunes made that very easy.
With the iPod, I would then just borrow people's iPods instead of CDs.
I didn't get into - and actually still don't subscribe to, a music service like Spotify. A few years after starting above, I would still just buy CDs from touring bands (these were bands driving cross country in vans and playing condemned warehouses, so safe to say their stuff wasn't being traded as mp3's, and if they were, they would have LOVED it). I remember buying some music off of iTunes Music, but I tried to not, as sharing their the system I had didn't work well - or even across my own devices.
MySpace Music was also big in discovery. Their whole music catalog was lost, though, right? Someone lost the private key?
I mean, people at the time did have large collections of CDs with tons of music. Piracy existed, sure, but it was something a relatively small number of tech-savvy people were doing. Hell only half of Americans were even using the internet at the time. And at the time, MP3s were super inconvenient - you needed a CD for your stereo or whatever you were listening to music on, and CD-R drives had only just started to become cheap (and by cheap, I still mean several hundred dollars, which was quite a bit at the time). I would be in no way surprised if greater than 90% of the music that was loaded onto the first cohort of ipods came directly from CDs.
Apple pretended it came from CDs people had bought.