It CAN'T be that iCloud is just for songs you have purchased in iTunes. That would make it FAR inferior to Amazon/Google -- it would mean a failure of Ping magnitude.
I have to assume there is a mistake in communication here. Maybe it will be that Apple will allow iCloud access to all songs in your library that they OFFER through iTunes (i.e., songs they can match -- think of the old iMixes, where you make a playlist, upload to iTunes, but only songs that match iTunes Store tracks are listed). Then in the future, they allow you to upload your own iTunes-absent tracks, Amazon/Google style -- to supplement the standard iCloud experience.
It has to be that... right?? It is beyond comprehension that anyone would cheer a service for iTunes purchases only. I am an

and iTunes fanboy and even I would see no purpose in that.