Not surprsied, but still disappointed. Apple, I thought, wanted to cater to the high-end user - in this case audiophiles. I guess that's not the case anymore (and MacPro users might agree with me.) I bought a 1G iPod in 2002because it was clearly to device that I needed to replace a car full of aging mix tapes and carry lots and lots of muisc, in the way the recordable CD's and MiniDiscs never would be. I switched to Mac just to be able to use it. They introduced Apple Lossless, which is great, but then they got lazy. They never introduced an iPod that could hold my library in that format. They never introduced support for playing "HD" auido. They let it languish at 160GB (Even reducing that to 120 for a time.) And now they want me to move to the all-mighty Cloud, which I'd consider despite the drawbacks, but it appears that it won't support even their own lossless codec. They are regressing in order to market to the tweeners and 20-somethings who listen to Lady Gaga and clog up machines at the Apple Store to use Photo Booth and Facebook.
So now I guess I need to wait for some other manufacturer to see there is a market, however small, for high-end digital audio players. Give me 500GB or more in my pocket and compatibility with all codecs and I'll pay whatever you want.
In the meantime, I'll continue to use a classic in my car and another in my dock speakers at work. If they discontinue them next week, I'll buy a couple spares. I won't be downgrading to a Touch, though, since I have an iPhone and the iOS interface is crap for navigating music.