This is so close to being awesome. I threw this link to a musician friend of mine when it showed up on Metafilter a while back, and we felt like it was so ALMOST there.
We felt like it wants to be cheaper, and wants to have a USB port so you can put the album you just paid $20 for into all your other devices. (Or a one-time use code to download it.) Then you can stick it on your backpack like any other button, maybe loan it to a friend you want to expose to the act.
Either that or load them with a copy of the concert you just saw. $20 for an item only available at the merch table for a single tour isn't very different from t-shirts; having a physical record of the whole show would be pretty cool.
But as something sold over the Internet for $20+shipping? It's cool but that's like twice the cost of a normal album. The form factor just feels like it wants to be an impulse buy, with impulse pricing.
(And on the other hand... I just paid $3 for a digital download of the new Glitch Mob EP. But I could have spent up to $55 on it to acquire a poster, a T-shirt, and a vinyl copy along with my download. I could see a Deluxe Package that included a Playbutton. As a cool bauble for the True Fans with a really good cashflow, it's not so bad.)
(There is a good chance that they're also so damn expensive because they're made in limited quantities, possibly by the same people who run the site. I drew a Tarot deck a couple years ago; you can get it now for $20 because I found a publisher who got it printed in China, but when I was making the things myself I charged $150 for them.)