Pretty sure it was never like that, it was always gated by iTunes.
It was an integrated system, not an open one.
Definitely is today. It's difficult to copy mp3 files directly to an iPhone and play them. Even from a Mac, but even more so from a PC or Linux.
I bet less than 1% of iPhone and iPad users do that. They mostly pay for streaming. (Again, not saying that's better, but just that the general public doesn't do Napster-like file sharing.)