It's because they're not storing anything new. They simply distribute the exact same file that they've had on iTunes to begin with if it detects a match of you owning it. Other services (Amazon and Google's come to mind) let you upload literally any audio file you want (to an extent), regardless of whether it's on their music store or not.
Both schemes have their pros and cons. The comparison of upload time during the keynote was a complete joke to anyone that knows anything about this sort of technology though: saying how much faster the upload on your service is that doesn't upload to begin with to services that do is just silly.
The bottom line is normal users (ie those who "don't know anything about this sort of technology") don't give a damn. It's a few hours vs a few minutes.
I know I don't have the best internet connection, nor do I have the smallest music collection, but that's a whole lot of time to be uploading at full speed (which makes my internet unusable).
They mentioned that music you have that doesn't match with anything already in the iTunes Store can be uploaded to the cloud. I don't think we have any details about the implementation yet though.
Both schemes have their pros and cons. The comparison of upload time during the keynote was a complete joke to anyone that knows anything about this sort of technology though: saying how much faster the upload on your service is that doesn't upload to begin with to services that do is just silly.