Why are youtube to mp3 converters illegal? I mean, it's basically just recoding a signal; I don't see how that could be an illegal action. Might as well sue me for recoding WAV to mp3 so more music fits on my phone.
Is this absolutely crazy? Yes.
Only in some legal systems. E.g. in some countries you can make a backup copy of a software you bought.
I believe eventually this will happened, and you wont be able to market or even program a non-cloud monitored player.
This will be accompanied by ratcheting up of subscription cost.
This dystopian situation was exactly predicted by rms more than 20 years ago [1].