Interesting, the hype around 24bit could kill off the CD, since CDs can't really compete with that and DVD-Audio and SACD failed to reach the mass market.
As a bonus to Apple they will take more space, especially if they use FLAC, so people will buy bigger iPods and iPhones.
SACD failed to reach the mass market, partly, because most music customers didn't really care about 24 bit audio. At least, not enough to pay more for it. I don't think it's different this time.
Music quality is not an issue for most people. If it was, low-quality mp3 and players with crappy headphones, and crappy computer speakers wouldn't be that popular.
But people with lots of money find it to be an issue. Or, they at least pretend to. And they will pay for the right to pretend to. :) And once the rich do so, we have a long tradition in our society of imitating the consumption habits of the rich.
It doesn't have to reach critical mass this time though, people who care about quality can download the better version, people don't care don't have to.
24bit, 96khz, 2 channels, 4 minutes * 0.40 (60% compression) = 55Mb per track.
At $1 per track that's, $579 on a 32GB iPhone/iPod Touch assuming no apps, games, videos, iOS or formatting etc. (i.e. it's actually lower)
As a bonus to Apple they will take more space, especially if they use FLAC, so people will buy bigger iPods and iPhones.