Microsoft is neither judge, jury, nor legislature. Yet, they seem confident that they have the power to define, by fiat, what is "fair use" in digital media. The MS Zune iPod killer will apparently encourage users to believe -- incorrectly -- that fair use permits "three free plays" of copied media files. Thus, just as the Zune makes it mechanically easier for people to illegally copy digital media files between devices, Microsoft will be inducing them to do more illegal copying by confusing them about what is and is not permited by the law. Of course, at the same time that the Zune will encouage and induce illegal copying, it will also tend to make perfectly legal copying more difficult -- if not impossible.
One may argue that our legislatures have been slow in addressing the copyright issues that arise from the spread of the Internet and other new media, however, it can't be acceptable for a corporation, impatient for the resolution of some issue of public policy, to further their business goals by simply taking on themselves the roles that we assign exclusively and properly to our nation's law makers.