"All it means is that it will take a bit longer depending on the decible level listened to but in the end the same result. The majority of people can't tell the difference between 80db and 100db. Also, ears adjust to the level of sound. Those that use headphones tend to perceives a gradual drop in loudness even though the volume setting hasn't changed. This is why people will turn up the volume after listening for awhile."
Untrue. The same can be said of any consistent listening environment. As compared to listening to cheap headphones, one does not need to turn the music up as loud, therefore it can't be as damaging to the ears. Further, with headphones one can listen at a lower level than external speakers. Headphone listening is not dangerous to hearing provided one takes the same precautions as necessary for any listening experience. Who says this? My otolaryngologist, that's who.
"It's not like Townsend was using cheap equipment either or it happened quickly."
False logic. Decibels damage the hearing. Poor equipment makes it more likely that one will listen at a decibel level that causes damage. Pete Townshend (and the Who in general) were well known for ear-splitting audio levels. It has nothing to do with quality of their equipment.
As for the exercise and headphones myth, it is commonly bandied about. Someone's been spending too much time at Headwize and other forums which perpetrate this "knowledge" with a bunch of circular references. Actual medical research indicates that this problem is relatively minimal, chances of damage are not twice as much, but on the order of a few percentage points, subject to the same caveats as above-- that good listening habits are required.
Is it easier to damage one's ears with headphones than with speakers? Of course. But that isn' the question. The question is, does cheap equipment make it more likely (yes) and is damage from headphones unavoidable (no). I think I'll stick with the MDs on this one.