So, you are against cable tv right? I mean, you are gust paying for streamed content... Hell on-demand style services through cable is on the rise. This isn't that far off.
Another interesting thing is that it would mean you would never lose your collection do to hardware failure. Your ipad dies, no biggie. you buy a new one and enter your password and bingo, back in action. It would also mean that you wouldn't require massive storage in a device to hold all your content as well.
It's an interesting idea, and really just an extension of cloud computing into the multi-media wing of the net.
When you buy a CD, you are paying your very own authorised copy of the content that you are free to do whatever you want with within the constraints of the law. When you pay for cable/satellite TV, you are paying for the entitlement to watch the content the provider shows as they broadcast it within the constraints of their terms and conditions. When you buy a pay-per-view movie on cable/satellite or go to the cinema, you are paying for the right to watch that movie once.
I've got nothing against cable/satellite TV because I know that I'm only paying for the right to watch the content as they broadcast it, not my very own copy of it.
When users "buy" their own copies of content, they expect unconditional access to it with no terms and conditions to agree to beyond what's in the copyright laws. With a service like this, that would not be the case. Users would simply be buying the right to access the content as Apple sees fit. Taking control away from the user is never good.
What if somebody wants to put their music collection onto a device with no internet access, or what if the user is on a mobile device but isn't within range of any Wi-Fi networks, thus has to deal with their provider's sluggish connection that's expensive to use and making streaming unbearable? Maybe in the future when we have a worldwide wireless network with no deadspots and amazing speeds that's accessible to the public, things might not be so bad from a usability point of view, but there'd still be the whole bending-over-for-Apple-and-letting-them-own-your-content thing.
I don't buy into the whole cloud-computing thing or the DRM thing. It rarely benefits the consumer, and even when it does in rare cases, such as this (I have to admit, the ability to listen to your music on any device with nothing more than just a username/password is neat, though letting users download as opposed to stream and then listen to it offline would be far better), they still don't have the consumer's best interests at heart. I like to have unconditional access to my content, not conditional and at the mercy of a big company that has dollar signs in it's eyes.
Also, who actually considers storage capacity an issue any more in an age where you can fit 32GB+ of flash memory on a device the size of a fingernail? Hardware failure? Learn to make backups.
I
own my music collection, the CDs and vinyls the bits in my FLAC files were derived from are my own physical, personal property. I am free to do with them whatever I wish (unless I make another copy of them, *cough*). I can listen to them whenever I want, on whatever supporting device I want without having to sign any licences or agreements. This pleases me.