Apple and Jobs have actually been in favor of this for a while, but were prevented from doing it by the music industry. See http://www.apple.com/hotnews/thoughtsonmusic/

Quote: "The third alternative is to abolish DRMs entirely. ... This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store."

They had a part of their library drm-free for a while now. I find it more surprising that they changed their position on their pricing scheme. Didn't they even cancel their deal with NBC because they were not willing to allow flexible pricing on their videos last year?

I think entire catalog DRM free + iTunes Store over 3G (instead of just WiFi) were pretty good reasons to finally allow variable pricing.

The DRM-free portion of the iTunes library cost extra money, and most tracks didn't have that option.

My uneducated guess is that the 1.69 pricing tier is a trade for stripping DRM off the backcatalogue.

DRM free tracks have not cost money for the last year.

I-did-not-know-that. (Stop upvoting me for being an idiot!)

Nor I. What a pleasant surprise.