Man I wonder what would happen if RIAA ruled the world... Anyway it says CD ripping and backups should be illegal.

As you can see, the argument is hinged partially on the cost of replacements. Why should you be allowed to make backups of CDs you've purchased when you can replace them? And why should CD backups be legal when users can already decided to purchase from (DRM-laden) services that do allow the limited copying of lossy music files? Here, again, we see the way in which the RIAA et al. would like to see contract law take over the domain of fair use. "Leave it up to DRM, you big dummies!"