Cd baby doesn't change your audio files in terms of reducing gain. They take your 16-bit masters and convert them to mp3 for their store. They also send your masters off to iTunes and whatever other places you choose.
I'm not a Pro Mastering Engineer, but I do my own mastering now out of what is probably some sort of existential idiocy. But I have learned some things.
"Too" loud" for mp3 is having so little dynamic range that when you approach Full scale, it'll clip like crazy after conversion. When I mastered my last album, I decided to master it as if it was going through Mastered for iTunes (roughly). I settled on a peak level of -1dBFS. There was still a couple of clipping samples at low quality conversion settings, but I figured it was worth the tradeoff since everything sounds bad at 128kbps.
Pitting my music against other music in iTunes and Spotify, I noticed that it's all pretty well the same volume. Same with Youtube. In fact, youtube is SUPER quiet on all material compared with everything else.
[RANT]
CDs are basically non existent for me. In fact I never listen to CDs. I've long ripped my old collection of CDs to HQ mp3. It's good enough to my ears, even though the Rips are noticeably sonically different when A/B'd to the CD, the rips still sound excellent, and that's what matters.
Mastering for CD, in my opinion, is over. With CD, it was the data quality that mattered. But data compression has gotten really good, and Social sites like Spotify, Sound Cloud and YouTube are the cat's meow for music - especially since you can play in "HD" modes, with like 48khz 24-bit quality ... streaming. That's insane! Why bother with CDs anymore, other than to wish for a bygone time when "things were so much better [quality]"?
We said the same thing about Vinyl. It was so much better than CD. And now CD is so much better than compressed audio. Next it will be compressed audio was so much better than whatever the next new data standard will be. But the fact is, the whole thing is about experiences. If you want the experience of vinyl, that's one thing. Social music and playlist building is another experience - totally different from the individualized vinyl experience. When mp3 was first hitting the scene, it had a big quality problem. But that is all but resolved (I think). When I listen to Spotify on the High Quality setting, there are no artifacts that I can hear. And I dare say that Spotify and YouTube are forces which will very soon need to be reckoned with.
In Canada, the last major CD chain, HMV, is finished. Bankrupt. That's a tell.
[/RANT]