They've confused digital compression and dynamic compression. Death Magnetic sounds worse on CD because of dynamic compression, not digital compression.
No, The 2nd para of TFA:
We're talking about compression here, the dynamic compression
that's used a lot in popular music. There's actually another
kind of compression going on today one that allows us to
carry hundreds of songs in our iPods...
Right, but then they quote someone saying that the video game version is better because of "digital domain compression", followed by a statement that "Digital compression is the process that allows a song to go from being a very big sound file in its natural state to a very small file in your iPod"
They are still talking about dynamic compression there. The music went through a different mastering process for the CD than for the game, and the game version was left with more dynamic range. His use of the phrase "digital domain compression" is misleading here, as it refers to dynamic compression performed in the digital domain.
To expand on this (and repeat what I just posted at NPR), Death Magnetic sounds worse on CD because of dynamic compression, not digital compression. If digital compression was the problem, then the Rock Band version would sound WORSE than the CD, because the CD has no digital compression (and Rock Band does). The CD is what you make MP3s out of, after all.
The CD master of Death Magnetic has had its dynamic range heavily compressed (which squashes the waveform), where the Rock Band version is uncompressed because the game mixes the song on the fly.
Meaning there is a digital domain and compression can be performed there. It is still ambiguous as to what kind of compression is being described. I agree this was intended to describe dynamic compression.