That makes me really really sad :( Pandora is one of the rare services which just scream quality. The service itself is great, the web interface is slick, the ads are slick, the iPhone app is amazing.
Id say it makes a lot of people angry. It's also another step in making people reconsider the concept of copyright for music.
I think someone's mentioned it here in the discussion: Copyright protection is not an inalienable right (like the right to remain silent), it's an instrument designed to have some desirable result (like tax deductions). Copyright in this case is preventing innovative products & services, and very probably harmful to the art itself. 'Small' artists & genres have the most to gain from the potential of free music.