Looks fine to me. But really - isn't it about music above all? What I want is high quality music - not just 128 or 256 kbps AAC files - encoded as Apple Lossless files. This should be possible, as all files delievered by record companies or indie-musicians today are encoded in Apple Lossless. To be able to purchase music in this quality would be good news.
Are you sure they are given to Apple as a master copy or CD or some other format? I find it hard to believe that they deliver it to Apple in Apple's own lossless codec. I think 256kbps AAC is fine, but I think it would go a long way to make then 320kbps, which has been considered "CD quality" by most, despite the nature of the MP3s that it was encoded in.
That is only an extra 64kbps added to the song, so I think that is doable. whereas Apple Lossless would be around 1Mbps. That is about 7.5MB per minute of audio. The DL times and storage space are now about 4x as much as 256kbps audio and 8x as much as 128kbps audio.
Another issue that Apple has to consider is that if they dropped 128kbps audio from their store would have to change the way they measure the capacity of their iPods. The iPod Classic would go from being holding 40,000 songs to 20,000 overnight. While we know what is going on, there are many that look only at the superficial packaging because that is what they can understand. I suspect that the people who I'm talking about probably don't care much about the kbps, which is why Apple continues to dominate with iTunes. I recall Sony listing a player or two as being able to hold x-many songs but we using 96kbps as the bitrate. It was there in the fine print, but the people they are marketing aren't likely to look at that.