|From Flickr user Meredith_Farmer|
A study in Japan took a look at two groups of young adults. One group was typical and the other group usually listened to music at full blast. They were asked to watch a movie and pick out a particular frequency from the background noise. Those who often listened to loud music were less able to do so than others. This kind of loss goes unrecognized in typical hearing tests and people may seem to have normal hearing while nonetheless being unable to distinguish background noise.
One of the doctors who worked on the study, Dr. Hidehiko Okamoto, says it makes more sense to use technology like noise cancellation rather than simply turn up the volume when you're in a noisy place and listening to music.