Actually, I don't like the "this music can only be played on this product" aspect of DRM. This is the main effect of Apple's proprietary system right now.
But, I can understand the concerns of those that own the rights to the music. As you've so inadvertantly admitted, the "backup" feature is second to the ability to load it on all of your hardware (not any of it... all of it). Having it play on only one device at a time is the crux. Backing it up is not. The backup becomes exactly what you pretend it is not... a copy of the music that can be played on another device by anyone else.
I would imagine the ultimate goal of the RIAA or any digital content centric companies will be allowing flexibility with some level of control. Not caring if it plays on your car stereo, your computer and your home stereo... but rather insuring that it isn't made openly available to everyone elses. Without some kind of DRM, this will not be possible. As it's implimented right now, it's not even close to ideal, but the groundwork for this needs to be explored.
I'd really like to hear skuzzy's "I could do it, but I'm not going to tell anyone how" solution.