The sweet spot of compressed versus uncompressed audio files

Q: At what point does compressed vs uncompressed audio files really become an issue?

A: You can have compressed lossless files (eg. FLAC files) that are sonically identical to uncompressed lossless files (eg. WAV files). The only issue you would have here is if you compress FLAC files very tightly, you will need a powerful computer to uncompress on the fly.

Now with respect to mp3 vs WAV or CDs; that's more of a lossy vs lossless question rather than compressed vs uncompressed question. For example, with mp3, the lower the bitrate (measured in kbps, an index of the file's audio quality) the more obvious the quality deterioration is appreciable with good headphones.

For streaming music, uncompressed isn't really viable because it takes up an extraordinarily huge amount of bandwidth to stream, so all radio stations / streaming services typically offer some level of lossy streams. For me, the 320 kbps Orbis bit rate that Spotify uses for streaming its Premium service is not an issue, even with really good headphones.

For local files, what you really get with compression is the ability to save some space. Typically I rip my CDs to FLAC files, and then rerip to varying mp3 rates when transferring to my phone or mp3 player because, well, like real estate, there is only so much you can fit in limited space, and either you fit a lesser number of quality files or more files but of lower quality.