I never said I didn't understand or use the cloud. I am just not crazy about being dependent on a connection to Apple's servers for everything. I don't think they're "just a storage location" either. When you use iTunes in the cloud, you don't own the media on the other end of the wire and it is not stored in "your" space. When you connect, Apple decides whether you are entitled to access the media and whether they want to provide it. I think that is totally at their whim. And your ability to even access Apple's servers is subject to your internet provider's whim (and everywhere else down the line) as well.
Putting that aside, I live in an isolated location and am totally dependent on Verizon copper for slow DSL, 750 kBit is about as good as it gets. Maybe someday there will be an affordable wireless option here? But I would rather have my media stored locally, under my own control. Works fine for me.