@octacon72
The streaming isn't necessary. Think of it this way. The golden copy is in "the cloud" (Google's servers). The cached copy is on your device. It would only need to "stream" the songs you don't have on your device. Then, it can keep them there for future playback.
Let's say your device has 16 GB of storage. You could store 50 GB of music in "the cloud", keep 2 GB of your most often listened to music on your device (no streaming would be necessary), and you'd still have 14 GB to spare for apps and other things. Want to listen to a song that's not in the 2 GB of music on your device? No problem. You'll still see the song as if it is there (via the cloud)... play it... it streams... then is stored on your device. The next time you play it, it won't need to stream. If your device gets dropped and run over by a bus, you just buy a new one, login to your account, and you're back in business... all of your apps, music, etc... are fully restored.
To assume that this is all about storing information in the cloud, then streaming every time you want to access the information really misses the flexibility of technology.