it's a specialist catalog, but very popular within its niche

I really haven't found any problems in collecting 320k Mp3s as a producer myself.

I think if most people knew the real way most modern music is produced and mastered now (on laptops), and how a lot of masters and music catalogues behind the scenes are literally re-encoded from mp3 backups, they'd see that lossless music is not an exact science.

Flac is also not universally supported by playback devices, and can become unsupported at any time faster than Mp3, so using more universal formats is not necessarily a bad thing.

That being said, I use HD lossless WAV copies for all of our own masters.

Regardless of how good high bitrate MP3s can technically be, my experience with MP3s has been poor. I can't remember the last time I got one that was of good enough sound quality that it didn't annoy me to listen to it.

That's why I go with lossless encodings. They aren't a guarantee of good sound quality, but the odds of them being so are much, much higher.

Personally, I don't actually care about whether or not FLAC is widely supported across devices. My media center will do on-the-fly conversions and lets me stream to anything, and if I need a different format for some reason, I can just convert from the FLAC to whatever I need.

I understand. I think the reason why they charge more for lossless is the additional bandwidth required to download them. Cloud host providers charge based on bandwidth, so they pass that cost on to buyers. I do know 320k VBR is usually undesireable, sometimes converting a 320k Mp3 back to WAV can cure some problems with frequency loss and artifacts... I don't know the specific answer to your dilemma, as flac formatted files are not usually something I use. Best of luck though! :/

I have no actual dilemma. Bandcamp is still good, and there's a chance that they will remain so. If they go away/get bad, that's just the loss of one source of high-quality music. There are others -- even if I'm only left with physical CDs.