This new functionality, which may be implemented midyear, would create a permanent backup of purchased music files for each iTunes user, allowing them to replace lost or damaged originals. Interestingly, record labels charge Apple for each music download, regardless of whether a user has paid for it, so Apple passes these charges to users.
This latest news aligns with previous reports that Apple was not planning to launch a streaming service in favor of cloud-based music storage. I'm very much a supporter of streaming music services (Rdio in particular), but if a backup of purchased digital songs existed, I would probably use iTunes far more often than I do. My only wish: could it be retroactive? I'm fairly certain there are some lost years of music floating around on an old computer from my college years.