So does this mean that file-manager apps will no longer be usable? Because that's a serious DO NOT WANT. I need access to my filesystem on my device.

Doing stuff like this is a promise that their less-power-user-y tools will do everything seamlessly, a promise they have repeatedly failed to deliver on. Getting Google Music to play nice with a my SD card was a nightmare until I gave up and just copied files over the network onto it directly and told it "search this folder".