I loved Bancamp because you could download CD-quality FLAC. Yeah, I can stream my music there but I want to load it up to my personal media server and just have it in the best reasonable quality possible (I know there's better than CD quality).
It's hard to justify as it's mostly subjective but objectively I think having music archived in a lossless format allows me to transcode to more practical lossy codecs as things evolve.
It's kind of like in the olden times owning the CD and you could re-rip anytime and whatever format you needed/wanted.
Epic doesn't care about any particular product or service. They are a publishers with aims to become a storefront, but plan to do so by passing off customers and devs and partners.
If I had to guess, it's because of money. There was more incentive at the time to grow fast and try to maximize profit than to limit growth and potential profits in case of a market downturn. Tim slightly explains what happened.