It isn't just that people are buying individual songs online...it is becoming a necessity. The overall quality of music on a given CD has gone down significantly. Granted, you may like a single or two, but how many CDs are entirely good anymore? Billy Corrigan (Smashing Pumpkins) announced that they were no longer going to produce entire records, but only singles, because people weren't buying CDs anymore.
While there is truth to that (obviously, by this story), I think it shows how bands are focusing on the short term game, singles. Of the last 5 CDs I purchased, only 1 had enough appeal to listen to the whole CD. Personally, I don't like the idea of downloading a load of singles and listening to what is effectively 'random' on my player. If I want to hear a band, I want to hear a CDs worth.
Boo to the recording industry.