Nick Heer, writing in January:
Spotify and Rdio probably work really well for people who see music as a transient background interest. But I’m difficult and picky, and music is extremely important to me.
This is a good summary of why you might want to keep a local library of music. I’ll add one more reason: historical metadata. I’ve been using iTunes for twelve years and I’ve accumulated twelve years’ worth of information on when songs were added and how many times they’ve been played. (My total play count is just over 133,000 right now.) I love being able to ask, “What was I listening to in the summer of 2009?” and getting an answer just by sorting by “Date Added”. Khoi Vinh believes that streaming services should be able to do even cooler things with metadata, but right now iTunes is the clear winner at furnishing that kind of information.