Even if your collection is low-quality 128 kb MP3 taken from a commercial CD, the iTunes-matched songs will be available back to you in 256 kb AAC from the master. No DRM either. Apple doesn't mind because it doesn't cost them anything in storage. Ten million users just point to the same song in iTunes, while Google will have to store ten million copies of that song.
The amazing thing here is the labels making the assumption that you paid for the music on your computer, while they usually operate on the assumption that you pirated everything. Apple paid some big $$$ for this to happen.
IIRC, Apple wrote checks totaling $150M last week to make this happen.
This, vs. Amazon blindsiding the publishers. Sometimes what’s legal is still a bad move.