Here's my thinking about the decision on the part of an artist to release their entire catalog to the public for free: if digital distribution has rendered direct sales to the customer significantly less worthwhile than it once was, they need some alternate source of promotion and revenue. A move like this would likely increase the artists' visibility in the public's eye without significantly harming their total revenues.

Notice that they give out copies of their songs, but don't release their copyright: want to download their music to listen to it on your iPod? Awesome, enjoy. Want to remix it or use it in a commercial setting? The music isn't licensed for that, you're going to have to talk to their agents.

This move is genius: it increases artists' exposure, ultimately leading to increased sales, licensing, and presumably also concert revenues. There's basically no downside to this.