I this is one of the better ideas to be hatched in the music business. I don't think it is the final version though. The bands whose music appeals more to the under 25 crowd my find the little bastards are cheap. \:o I remember as a kid I had to mow a lawn, maybe two, to buy an lp and a blank tape. I was quick to borrow an lp,or later a cd,and tape it. I outgrew that at about 20. As an adult I have more appreciation for others' efforts and a more developed sense of honor, as well as a desire for quality.
The big concern for me as a potential customer is quality- mp3's are like a tape to me, fine for everyday use but i want something good archived- like my lp's taking up all that space. If they offer a download in something GOOD, i'll seriously consider it.
The greatest potential benefit I see is relegating the record companies to marketing roles and leaving the recording and performance decisions to those with talent.