JB,
It's not a mistake or anything you are doing wrong. Professionals copyright their pictures. You are not paying for the c.d. to GET the copyright, you are paying for the c.d. to have a digital copy of their images. They intentionally make them grainy so that you can't make reprints of them. They own the pictures. So they expect you to come to them for reprints. It's all part of their "professional photography studio".
If you weren't informed of this, call customer service to complain that you want your money back for the cd. I think they market this "add on" without telling the whole truth just to make more money.
We have found that we can download the pics off their websites to have a digital copy without having to pay for the cds.
If you want a copy of your pics, technically you are supposed to go back to the studio or online to order more prints. You could take your print to a Kodak kiosk and make a "photocopy" also. However be advised, that this is not recommended as they are copyrighted. The kiosks usually say on them or near them that they are not intended to be used to duplicate copyrighted photos or materials. With that said, I know someone who did this for a family portrait and said the copy was great. I saw the duplicate and it did turn out very well. It wasn't 100% the same, but their logic was that they wanted an extra copy for a distant relative and the quality wasn't as important as saving the money on a reprint.