Simplify Media - P2P in disguise

I'm not sure how long this will last but there is a really cool software product called "Simplify Media" (http://www.simplifymedia.com/) that just became available for beta download. Simplify basically acts as a plug-in to your desktop music library. Friends can subscribe to your library over the web and listen to tracks that you own that are streamed to them. This does not allow users to pirate the music (at least not easily). It then prompts the listener to purchase the track via iTunes if the person likes it.

Why do I think this won't be around for long?

Unless Simplify Media has some kind of licensing deal with all the major labels (which it doesn't appear that they have at least based on their website and background information), isn't this just a Peer to Peer (P2P) network in disguise?

Early versions of iTunes allowed for this exact functionality but it was removed by the request of the labels. Now, all you get in iTunes, is the local area network library sharing (good for inter-office but very restrictive).

How long will this last? On Simplify's FAQ page, they address the legal issue as follows:

"Yes. Music is streamed friend-to-friend, and only within small, private groups. There are limits to how many friends can be on your Media List and how many listeners can concurrently stream music from your computer. Friends cannot burn remote songs to CDs, transfer them to an iPod or mp3 player, or access them when you are logged off. Links to partner stores let you purchase music you wish to own."

What's funny is this sounds exactly like other networks which the RIAA has militantly pursued and shut down. I think the legal ground here is shaky. I wish it wasn't because this is a cool idea.