I've been using the service for some time now, and I think the price point is right in the sweet spot. 10c buys you the capability to play that song an infinite number of times in its entirety (online). Plus, just like other music stores, they give you deals on the full albums. For instance, Queens of the Stone Age: Era Vulgaris (11 songs) is 80c. And, as the article mentions, previewing songs or albums (full songs, not 30s clips) is FREE. I think I've spent about $10 total and I've got 15 albums in my "web collection". I'm at a computer pretty much all day anyway, so this is the perfect solution for me.

But right there, you had the catch.

(online)

Now, if it was 10c and I could put it on my iPod, or use winamp or something, they'd have something.

Over time it will become less and less of a catch. In my opinion, music_on_the_cloud > music_on_a_disk. I assume they'll come out with a version of the player that caters to Android or iPhone (or possibly any web-enabled device with a Flash player). It's not full freedom, but it's also not even close to full price.

And what if your internet goes down?

What if you lose your job and can't afford your internet connection?

All of a sudden you lose access to that library of music. Let alone if the service itself goes down.

True, but it's $0.80 cheaper than the nearest alternative. At $0.10 a song, you can easily download an (or close to) an entire album for $1, and I could go for that any day of the week.

Yes, but then you can only listen to it on the web. Not on your iPod or if your internet goes down or.. the list goes on.