This is a HUGE win for everyone: Harmonix the company, Rock Band the games, all of the musicians, and us as players. It's a blend of the iTunes music store and the iTunes app store, both of which were ground-breaking, genre-defining, and they both remain hugely profitable to everyone involved. This is going to let them build up their music library to be even bigger, and it was already large compared to Guitar Hero: World Tour's.
So far, both RB and GH:WT have been founded on songs sequenced by the game creators. While they've done a good job, and I can't really see another way to get started, it can never scale. There's so much music -- even when you limit the pool to music that can be fairly accurately portrayed by the combination of guitarist, bassist, drummer, and vocalist -- that this approach can only ever be a tiny, tiny drop in the bucket. Releasing the sequencing tools allows for crowd-sourcing, which scales very well indeed. There is going to be so much music available now that never was and never reasonably could be expected to have been made available via the old model.
I expect that indie musicians, and the savvier mainstream groups (I'm thinking of Radiohead here), will be the first ones in the door. If the record labels know anything about anything (which might be an unreasonable expectation), they'll eventually get in on this too.
I see two potential problems with this. One is that this could possibly limit their future expansion plans. Presumably there will be a Rock Band 3, and I would expect it to add features from RB: Beatles like multi-part harmonies. If songs are sequenced for RB2, will they be updated to take advantage of newly features in the future? It's very easy to imagine idiotic record labels getting all their stuff in once, with mediocre quality, and then never updating them. Harmonix is going to have to exercise its veto power a lot -- both to keep quality high, and to delay songs that really need upcoming improvements to be played the way they deserve to be.
The other problem I see is that the Wii and PS2/3 platforms are getting screwed. It'd be one thing if there were ONLY a delay between releasing on the Xbox and releasing on the other platforms -- that'd be ok. But releasing on the Xbox, and then maybe sometimes releasing on the other two, depending on some vaguely-defined metric? That's completely the wrong approach, and sounds like holdover thinking from the old way of doing things. Who's going to judge which tracks are eligible to be transferred to the other systems? At some level, that's always going to end up as judging the song, and more importantly imposing that judgment on the users (the paying customers!) of the other systems. I can't think of a valid reason to segregate the fanbase this way, and I think if they stick to this plan it will come back to bite them.
Still, based on the initial announcement... huge, HUGE win.