Well I don't think it's a good deal, but I agree its the best deal Apple could get. Effectively they don't have much of a bargaining chip.

For me, the only acceptable deal for buying music online would be for it to be as cheap as it is to buy in shops, as DRM free as a CD is, and to include album artwork and lyric sheets (and whatever else accompanies the cd, bonus extras etc).

I buy all my music online through amazon, cd-wow or play.com, and then I pretty much rip it, and archive the CD.