"5.2 Our Right to Access Your Files. You give us the right to access, retain, use and disclose your account information and Your Files: to provide you with technical support and address technical issues; to investigate compliance with the terms of this Agreement, enforce the terms of this Agreement and protect the Service and its users from fraud or security threats; or as we determine is necessary to provide the Service or comply with applicable law"
As my pal, Jan Wildeboer, Red Hat's EMEA Open Source Evangelist put it, "I suspect that continuous inspection is part of the deal to get the music industry accept these offerings--IP radicalism at its best." He's almost certainly right. In return for the "right" to play your music from the cloud, you have to put up with Big Brother.
I like Amazon's services, but I don't like it well enough to put up with this nonsense. Besides, there area already services out there that offer similar services without such draconian privacy violations. For cloud-based music, there's SoundCloud and Mougg. If it's just cloud-based storage you want, Dropbox is still my cloud-storage service of choice.
Nice try Amazon, but you'll excuse me if I don't give you the right to access, retain, use and disclose my account information and my files.