I'm one of the persons that doesn't have a CD-RW. Plus I don't know how to download anything (except for the free Violet Hill single). I looked into getting an iPod, but in the US we can't download most UK songs. For example, I wanted Rule The World. It has never been in the US iTunes. It's next to impossible to order from the British iTunes. So getting the CD single is the only option; it's easy to order from hmv.co.uk. I happily bought my Rule The World (along with many other CD singles) during a London trip earlier this year. And none of them are collecting dust on a shelf. I bought the Uninvited single for 5 pounds, which I consider a good value as it contained the extended version and two previous singles. I think CD singles and vinyl singles should continue as a niche market, similar to jazz, classical, and easy listening. To be profitable, the CD single price can be increased to 2.99 with a minimum of three tracks.
Album sales are down because there are too many other entertainment options (such as games, video, film, and internet). I don't know anyone who still buys CD albums like me. The US album sales (per capita) are much lower than the UK. I used to walk into a London HMV, and it would be 90% music, 5% video, and 5% games. Now it seems to be an equal split, or with music at around 60%.