Nope, you misunderstand what the loophole was. It's utterly irrelevant whether or not it's easy to copy the music out.
You need to forget "plain English" and what "makes sense". We're dealing with the law and legalese. You need to think like a computer running into odd code. If a programmer writes "int Two=3;" then you'll get "Two+2=5". You need to obey the definition you're given, even if it clashes with what you think it should mean. You can't just assume Two+2 is supposed to be 4 when the code (or the law) says something different.
This law has a definitions section, and we are concerned with with three key pieces. I'll trim it to the critical bits.
A "digital musical recording" is a material object [...blah blah...]
A "digital musical recording" does not include a material object [...blah blah blah..] in which one or more computer programs are fixed
Therefore, according to the law, MP3 files on a computer hard drive are not "digital musical recordings".
A "digital audio copied recording" is a reproduction in a digital recording format of a digital musical recording [...blah blah...]
Therefore, according to the law, an MP3 player that copies an MP3 off of a computer is not creating a "digital audio copied recording".
A "digital audio recording device" is any machine or device [...blah blah...] making a digital audio copied recording
Therefore an MP3 player copying MP3's off a computer is not a "digital audio recording device".
The law only applies to "digital audio recording devices", therefore nothing in the law applies to MP3 players. Unfortunately this shitty law does seem to apply to a car audio system copying music off of CDs. Unless the judge gets "creative" in interpreting the law, it seems to me that car manufacturers are going to have to pay damages for every unit produced so far, are going to have to implement DRM on these car audio systems (preventing them from loading any song that's flagged as already being a copy), and are going to have to pay royalties to the RIAA for each future unit sold.