Michael, I think your assumptions are wrong when you write:
"Although at first blush this sounds great for users, it's reasonable to question if it's a practical move for Microsoft, as many users could download most if not all of their favorite music within a month."
Don't expect Microsoft to let consumers download content in a normal .mp3 file format. According to their ToS found here (http://www.xbox.com/en-US/Legal/Usage-Rules):
*Failure to sign into Services at least once every 30 days might allow digital licenses to expire and therefore deprive you of access to previously downloaded content
**For music downloaded onto external devices, you may need to connect these devices to a computer and log into the Services to maintain access to content
As such, you won't be able to keep access to all the music you download without a subscription. Most likely, Microsoft will use its own music app with its own file format that requires a license check every 30 days or becomes unplayable.