Thing is, most people don't care.. and the current quality is good enough. A vast majority wouldn't know what lossless is in the first place and would be surprised that the current format isn't the best quality - and couldn't tell the difference between iTunes music and a CD. Remember, Apple cater towards the low end of the 'average' user... not people like you, who obviously are aware of lossless and audio quality.
I agree that many of the kids probably don't know the difference and can't tell because they listen to their music on poor quality headphones or cheap iPod speakers. But this demographic isn't buying iTunes music anymore - they're using the streaming services like Spotify or the unlimited music services included with many smartphones now.
The market for iTunes downloads in the future is people like me. People who would rather own than rent their music. People who buy a lot of CDs but would prefer the convenience of downloading if only iTunes would provide the option to buy lossless tracks.
Do you see what I'm saying? Apple is locked in a diminishing market with their current strategy of only selling compressed music. I know why they're doing it - they don't want to increase the music file sizes because that would only highlight the pitiful memory capacity of iOS devices maxed out at 64Gig.
I don't think I'm all that unique or special. I like listening to music so I invested in a decent pair of speakers and headphones. The difference is noticeable once you do that in my experience.
Don't forget that it's not just the kids who buy Apple products. Most Apple products are bought by adults with a decent income and they tend to be the ones who care about quality. Ok the iPod was originally for kids but I wonder how many are actually sold to adults now who want a simple way of storing and listening to their record collection.