I thought it was similar to iTunes "music match"? They pay a small amount of money to the copyright holders, who accept it on the premise that it's better to get some money for pirated music than none. Also it's a way to make former pirates "legitimate" without asking them to pay huge amounts of money for their collections. The copyright holders hope that they will stay straight after signing up.
After I uploaded my music collection to google music I've since bought 50 or so songs on the service. Before that I'd only purchased one CD from a local band in the last decade. So a good solid product at a reasonable price converted me.
I used All Access for a while but if I really wanted some music, I often went and bought it. That way, even though I don't subscribe anymore, I still have some of the music I really like.
