The new program would serve a couple of purposes. It would be a sort of insurance policy for those who might see their iTunes libraries corrupted or destroyed. It would also allow those who have multiple iDevices to download their music to all their devices rather than having to tether to a computer and sync via iTunes.
Will music labels go along with this? They've caved into Apple before, but they have also made certain demands of Apple, too. For example, when Apple removed DRM from its iTunes music content in 2009, it began selling music in tiers, something it was reluctant to do previously.