Can't you just record in real time from a digital output on an audio CD player?

Yes, assuming (1) you have a digital-output CD player, and (2) you have a digital input on your sound card. This is still more troublesome than the ripping and auto-tagging from a regular ripper program, and hence, more trouble than most consumers would go to to rip a CD.

This is discussed at www.cdrfaq.org as well, and if I recall correctly, some (not all) of the copy protection schemes take digital output into account and attempt to defeat it as well.

Keep in mind that I agree with you, I'm just playing Devil's Advocate to clarify why the record companies are trying these protection scheme. I think these schemes will backfire for all of the reasons I already cited in this thread from over two years ago.