Thanks for explaining. I figured out how to make a playlist local/offline in the Mac version of Spotify.
If I was going to consistantly spend significantly more than $120/yr on music in iTunes, the Spotify model might be a reasonable alternative to iTunes.
But if it's like you say, and the actual files themselves are not accessible when you mark them for local storage, it's more for someone who wants to listen when they don't have internet access (or wants to save on their data plan) than for someone who wants to permanantly own their music collection. It's not like you own those files. If you ever stop paying the $10 month, or uninstall Spotify, or Spotify goes bye bye, they are gone.