You are confusing two issues. That statute (17 USC 1008– I would take you more seriously if you knew how to cite a statute) is talking about copying a music file which you own for your personal use. It is not talking about copying a music file which someone else bought for your personal use.
We were talking about copying the copy someone else had bought, for the purpose of sharing it.
The case you cite is a case where rio was sued for producing MR3 players since people would use them to copy music illegally. The court in the part you are referencing is saying that they have a very legitimate purpose for copying your own music.
The case they were relying on was talking about using a VCR to record TV shows for later which the court allowed since it was merely “time shifting” when you would watch what you were anyway entitled to watch. Similarly, when you copy your music, you are merely “space shifting” it from your computer to MP3 player.
Again, I have never studied this, and this is just from looking at what you posted. But you’re going to have to do a lot better than that. You should know you are incorrect when a simple google search shows that the entire internet world thinks you are incorrect.