No, this is just part of the negotiating process. Apple has done great things...dragging the record industy behind it. I have no problem with either proposal as outlined. Pay 1.49 for a new song or .70 for an old one. I buy the older ones in general. The invisible hand of market forces will result in higher quality songs on each CD, unlike the filler songs we have seen in the past few dacades.
Apple is coming to have the same place in the distribution chain that record labels had, and that confers some big advantages. Suppose Apple simply said to artists "post your music on iTunes. We'll pay you 25 cents for every $1 song sold." That's a much better share of revenue than the record labels provide to artists.
The artists would be giving up the promotion that the record companies provide, and they'd give up advances. But they'd get a higher percentage of the take.
The labels major advantage is their back catalog, which is a goldmine of intellectual property. Lack of that back catalog can cripple a service.
Apple would not necessarily have to take on the talent spotting/editorial function that the record labels currently provide. Disk space is cheap. Put it all up! Trance accordian group from Sandusky? Why not! It costs nearly zero, they don't have to press any CDs, and they don't really even have to guess whether they're good or not. If they're good they'll sell. If not, they'll take up fifty cents worth of dsk space.