Using little wing's worst case of wav files, you could fit a 3TB drive - about $100.
Assume (you know better than I do), 3 minutes/CD X 600CD's = 1800 minutes or 30 hours.
These numbers indicate if you needed the back-up, you would be burning CD's for 30 hours at $3.33/hour.
And the other consideration is how difficult would it be to find 30 hours to burn the CD's?
Of course you may never need the back up, and keeping the CD's is effortless. (but store them at your or wife's work or with family/friend... theft or fire might get both your collection and the server)
Risk theory would look it as (if, for example, the chance of failure was 20% over the life you intend to use this drive). I also use $15/hr as the pay rate you would be willing to rip CD's for.
(Chance of failure/loss) X (cost of failure) = value of preventing failure
(0.2) X (30hr X $15/hr) = (0.2)($450) = $90
This (using my arbitrary assignments of 20%, 30 hours, and $15/hr) indicates the hard drive (which essentially prevents the consequences of a failure) is worth $90 in this situation.
Thanks for humoring my OCD tendencies!