This is exactly what I do. And for the precise reason that I don't trust some cloud based third party service to not become unavailable for reasons beyond my control, which is exactly what's happened here. Disk storage and backup for 400-500GB of mp3 and aac is cheap.
Glad it's not just me doing this then! My 160GB iPod classic is still going strong.
It's possible to get it going even better than strong. I have an old 60GB iPod that I swapped an SD card adapter into in lieu of the hard drive and then used the extra space to put in a bigger battery. The parts are super easy to find on ebay and now I have a 256GB iPod that can play music for 50+ hours straight.
Did you follow a guide for this? It sounds like a great way to extend the life of my iPod indefinitely!