Is AllofMP3 just an exchange rate issue?

The US is keen not to admit Russia to the WTO until AllofMP3 is closed down, apparently (ZDnet). Not because AllofMP3 sells cheap MP3s to Russians in a way that is legal in Russia, but because the Internet allows Americans and Europeans to buy them for a few cents rather than the dollar that iTunes charges. Now, it seems pretty clear that it's illegal for Americans and Europeans to do this, but still. What this episode says to me is that a good or service is far cheaper in Russia than it is in Europe, the transaction costs for Europeans to import it are almost nil, and that all we learn from this is that the exchange rate is out of whack. Yes, the music industry would like to price music in each market according to what the people there can afford (P2Pnet) - as with any product, producers would ideally like every customer to select the price that they can afford to pay. So exchange rates between Russia and the west are failing to reflect the relative values of the respective currencies. Is that all that's going on here? And will the exchange rate simply move to correct it?