One solution that was bandied around back then: to create a Secure Audio Path (SAP) all the way from the playback software to our speakers, protecting then whole chain with digital rights management (DRM).
The person who recorded the song can then share it via P2P with millions of music fans who would never bother connecting an analog recording device to a computer's output and hijacking the audio that way. The analog hole can allow someone to record otherwise 'protected' audio on its way to speakers. The fear driving this shift, which did not happen: the so-called 'analog hole.'
Once upon a time, there was this scary idea that computer manufacturers would lock down our machines with a purely-digital, 'protected,' end-to-end music delivery system.