>In fact, as far as major services...

of which at that time there were only 2 or 3.

Why did Jobs do this?

Countries in the EU were demanding that he do so if he wanted to sell product there. Jobs was not interested in dropping DRM until the countries started bitching. Norway banned the iPod due to the iTunes walled garden creating captive audiences without opportunity for choice in media vendor (due to incompatibilities with competition services) and France started slinging similar threats.

It all seems so altruistic in hind-sight, but really he (Jobs) was being pressured by the nation-states, and he had the opportunity to look like a pioneer by dropping DRM (an endeavor that Apple felt pretty keen about with FairPlay) -- making the competition look petty and selfish for having DRM, while simultaneously satisfying the desires of the nations with markets that he wanted to compete within.

The whole story is in that link you included. I got a different vibe from the article than you did, I think.

The music industry considered them, then

Let's throw away marketing/PR part from what labels try to act and we'll see a simple fact: these parasites should be dead like 10 years ago. Almost all of the profits for musicians in digital era are made by concerts and merchandise, individuals could make some through direct sells and Patreon. Major labels charge 70-90% of the income and exclusive copyright for masters, which is a bit overpriced service.