I went all ipod a while back and imported all my CDs and have subsequently re-imported many at Apple Lossless rates as my knowledge of how this all works grew. Storing CDs and cassettes and house moves was a pain with a large hifi and collection.
I then had a run of buying only downloads, but I have stopped that now because;
1 - downloads are too expensive, especially as they have no second value. In effect what you buy is worthless.
2 - I was backing up my downloads by burning to discs, so I have to keep them like I keep the CDs as back up. Boxes in the loft.
3 - I got annoyed with itunes when I went to make a large purchase on gift vouchers, and the system crashed and my account was charged instead. Then I decided to upgrade to plus, had to get a whole lot upgraded, even stuff I no longer had, and then a week later Apple changed to allow upgrading idividual tracks. Finally, my favourite music shop Fopp reopened after having gone into administration, so loads of CDs for less than itunes download prices.
I cannot see myself parting with my ipod as I really like the sound of it. It is very convenient. Any computer reliability worries are the same as with my old system; I have had to replace Denon and Arcam kit that either did not work or broke down and my Rega had build quality issues. An ipod and a decent computer is going to be less than what is generally regarded as mid range hifi.
Getting CDs means lossless downloads and you still have value in what you have bought.