As someone who designs Digital record and playback systems, I can tell you that this is done all the time, but for commercial applications. The problem is that for CD music, people want real-time playback. This just wouldn't be feasible for that. In addition the power required for refreshing the RAM would prohibit portable players. A better idea but one which also has drawbacks for real-time applications is to prefetch some fixed amount of data. Of course all of this is moot because even if you produce these transports, you'd have to redo the CD spec as it's designed for real-time reading and not bulk I-O.
New Transport Approach
With never-ending advances in technology and tumbling prices, I wonder if any high-end audio CD player manufacturer is considering an approach such as this - populate the player with 700 megabytes of RAM and pre-read the whole CD into RAM. We know this is completely reliable (or else our beloved MS Office wouldn't work). Then the whole transport system could be shut down, eliminating any concerns about mechanical or electrical noise, and the "CD" could be played back straight from RAM through the DAC. It would seem like this would reduce or eliminate jitter completely. There would be an "initialization" time penalty, but I would think for the high-end market, that wouldn't be a huge deal. Any thoughts? -Kirk