I'm definitely NOT a designer of digital recording and playback systems, but I've integrated lots of related but unconnected systems in my professional life. It would seem here that you already have a functional (and cheap!) design for reading a CD into RAM, and as others have noted, it's already incorporated into many high-end players to cache data in RAM and re-clock it out to the DAC. I don't want to over-trivialize it, but it seems like a little "glue" to put the two together would suffice.
I agree with everyone that in the "I want it NOW" environment we currently live, the loading delay would be unacceptable for a mass consumer version of this, even if it was cost-effective. -Kirk