Sometimes I hear a band and am just in complete awe, but at the same time I'm pissed I didn't think of it!
Should I discard this music for it might be bringing down my confidence in playing or should I crank it and listen to it 24/7 and do my best to not rip it off?
Niether. Just keep practising, that's what the musicians your in awe of did.
Quote by Zaphod_Beeblebr
Theory is descriptive, not prescriptive.

Quote by MiKe Hendryckz
theory states 1+1=2 sometimes in music 1+1=3.
Learn from it, why is it so awesome? Analyse it, try to work out what it is you like and then try and adapt it into your own music. Do it now!
Yeah, the last thing you should do is just completely throw it away. Once you analyzed why you think it's so awesome, you should start thinking, "well, how can i possibly make this better/more my own." You can try fusing it with stuff from other songs you though were cool. This is pretty much the essence of being inspired by another artist; you're pretty much saying "I think that this is really cool, but I think I can make this better!"
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