- No need to make backups.
- Access it from anywhere.
- Rental and samples become feasible.
- Files aren't taking up your disk space.
Now to destroy those arguments:
Backups. Sure, major corporations make backups, right? It's not like any of them have lost customers' data before? Besides, this is pretty well offset by the fact that you need to be online the entire time you're using it. Which brings us to point two...
Access it from anywhere. Well, sure. Except when you're commuting. Or in a remote area. Or anywhere without a fast enough connection. Sure, in theory we should be able to get good enough bandwidth over a cellular network just about anywhere. In practice, it'll cost you an arm and a leg in the few places it's available with a strong enough signal to do the job.
Rental. Yes, with this type of system we can rent music, movies and games using a purely online distribution system. Just like with all the other DRM schemes. It isn't new and it doesn't solve the existing issues.
Disk space? Space is cheap. Like terabytes under $100 cheap if you look around. The only case this is any advantage is in mobile devices with flash memory (which even then is growing rapidly), and I already covered the problem with mobiles.
Ultimately, at some point we are going to want to use these files, and when we do, the data - encrypted or not - is going to have to be sent to us. Copying that transmission will be trivial (hello airodump). At that point, it's fundamentally no different from any ordinary DRM scheme. The only difference is now it's even less convenient, and it'll take slightly more effort to keep even an encrypted copy.
Sure, now they can revoke access to the copy on a whim. Previous systems could do exactly the same by revoking your keys. Thus why many existing systems require you to "check in" online when starting the program, and require you to keep the software up to date to be allowed to use it. Quite literally the only difference is where the files are stored. It doesn't give us any new advantages nor any new restrictions. Except of course that now we can only use it on a machine with a fast, reliable Internet connection, for as long as the servers remain online. Oh, and expect lower bitrates - streaming takes a lot of bandwidth, after all.
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