So basically Amazon is providing users a virtual hard drive that they can access anywhere. Seems simple enough. Why would this be a problem? Well the Music Industry, as a whole, says Amazon and users aren't licensed to do this with their music.
The first thing most of us think is, "What? I bought these songs. Why can't I do this?" Well as far as the Music Industry is concerned you only purchased a license to listen to the music in the form you purchased it on. Technically they don't even want you ripping your CDs to MP3s. From their perspective, you bought a license to listen to the music on that CD, that's it. Ideally they'd like to make you pay for each different way you listen to their music. That's how they look at it. It's not your music, it's theirs and they can tell you how you can listen to it.
The think is that violating that license was not illegal, it was just a violation of the license that they could do little about. So with the Amazon Cloud Drive/Player, they aren't going after us music listeners. We aren't doing anything illegal so what good would it do? But with Amazon they can pressure them with other means. Amazon sells a lot of music. The various music publishers can say, "Well if you want to do the Cloud thing then you have to play a license fee or we'll pull our catalog from your store." Of course this would hurt them too but the Music Industry doesn't want to cede ground on this. They did with allowing users to rip CDs and they are probably regretting that still. After all thanks to the extremely customer unfriendly law, the DMCA, it would be illegal to circumvent the copy protection to rip the CD.
The thing is, if this goes to court, and it may, the Music Industry may be forced to give up this fight. Is it fair use or not for users to be able to put their MP3s on a virtual 'cloud' hard drive somewhere? Personally I say yes it is. How would it be any different than me putting my music on a thumb drive or a portable hard drive so I could play the music anywhere? I don't see the difference and perhaps the court wouldn't either.
I'm actually hoping this does go to court. Amazon has the deep pockets to do this and they could stand a fighting chance, as compared to a small start-up company that would simply be crushed or paid off to go away. Then we'd have a clearer understanding of what rights we have left as music listeners. Maybe for once our government would side with the people instead of the corporations.