Yeah, pretty much. In their defense they’re more resilient to greasy kid fingers and being dropped behind the couch, but I still wish the data was actually stored on the card, or on some form of local storage. We had an mp3 player with an SD card before that, but then you can’t switch playlist as easily.
If it’s truly awful you might be in phone call mode. If the microphone is enabled it switches to the phone call profile which only supports a single, extremely shitty codec, so if it sounds like you’re listening to FM radio with very poor signal, you should probably switch to a microphone not attached to your headphones.