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The early digital recordings were incredibly expensive from the sound of the machines they were creating. I've lived through a fair bit of computer audio starting with the BBC B. That was when a tape player recorded and played back your programs. That was early 80's so I've no idea what the big studios were up to before that, there must have been some cool systems around though.
Whenever the conversation turns to digital rates I recommend reading Dan Lavrys' white paper on the subject.
Airhead-
Downloaded, will read at leisure. I followed the development of compressed audio by the MPEG group closely in the 1990s. Compression then seemed of the essence, given the cost of storage. Not an issue now!
BTW, Wiki confirms that the Ry Cooder record mentioned was the first digitally encoded record on major release.
HarmanMogul
Thank you, that's a very informative post. I didn't know Steely Dan tried to record Gaucho digitally but abandoned the experiment — still sounds mighty fine to me! I seem to recall Ry Cooder's Bop Till You Drop was bruited as an all-digital recording, and that was 1979.