> About the only intellectual justification I can come up with is that, as a free service, it's easier to position something like that as a way to discover artists. I think, by selling a subscription, their customers would be more likely to view their consumption as legitimate, and so wouldn't feel compelled to later turn around and buy the music they were listening to.
Well, think of it this way: that's exactly what public libraries already do - their funding comes from tax dollars, so they don't need to turn an operating profit
Actually, public libraries are arguably worse, because tax revenues tax not just the consumers, but the artists themselves. Not only do they give artists' work away for free to consumers, but artists are actually forced to pay for others to access their work for free!