I am not sure what made them such a success (Soundcloud is awesome, I am just wondering). I think marketing and then prominent artists played a huge role. Soundcloud also seems to have a very open policy for mix-sets that use non-free music (legal "grey" area).

Sites like http://be.electrobel.org/ , http://archive.org have been around much longer (I do not know how they worked 5 years ago and for some sharing music might ((have) require approval by mods). And of course more local ones like http://www.dogmazic.net/index.php?op=edito&choice_user_l... or http://www.myownmusic.de