1) data is a stream of bytes
2) data is only a stream of bytes
That's it. And it turns out that's a pretty powerful abstraction... Except it requires the developer to write a lot of code to massage the data entering and/or leaving the pipe if either end of it thinks "stream of bytes" means something different. In the broad-and-flat space where it's most useful---text manipulation---it works great because every tool agrees what text is (kind of... Pipe some Unicode into something that only understands only ASCII and you're going to have a lousy day). When we get outside that space?
So while, on the one hand, it allows a series of processes to go from a text file to your audio hardware (neat!), on the other hand, it allows you to accidentally pipe /dev/random directly into your audio hardware, which, here's hoping you don't have your headphones turned all the way up.
This example also kind of handwaves something, in that you touched on it directly but called it a feature, not a bug: pipes are almost always the wrong tool if you do want structure. They're too flexible. It's way the wrong API for anything where you cannot afford to have any mistakes, because unless you include something in the pipe chain to sanity-check your data, who knows what comes out the other end?