>they convinced the labels to stop requiring it.
Are you sure it wasn't the other way around? People were building huge libraries of music that only worked on Apple products (iPods and iTunes) around the time the labels allowed Amazon to start selling DRM-free MP3s. Apple would have gained an enormous amount of leverage if the labels had allowed that to continue: "Oh, you won't accept our terms? Well, then your product won't be playable on 90% [0] of portable music devices [1] and won't be available in the largest online music store (and your competitors' will be)! I hope not all your artists have left by next fiscal quarter." For all he talked amount it, I'm not convinced that Steve Jobs ever wanted to see the iTunes Music Store go DRM-free.
The market penetration of iPods meant that only path forward for the labels was one that allowed people to listen to music on their iPods. The only way to do that was selling DRM-free MP3s or protected AAC files. As a bonus, DRM-free MP3s worked on all the cheap flash-based players (which always had greater deployment than any of the DRM-compatible players from Sony and Microsoft).
[0] A number generated by my PRNG (posterior random number generator). But the iPod Classic really does have an absurd share of the >64GB market (probably declining now that you can get tablets and phones with 128GB of flash).
[1] Don't forget that Apple has only ever supported their own DRM. Protected AAC files play on Apple devices and only Apple devices. Apple devices support only protected AAC and DRM-free formats.