According to Gigaom...
I don't know about anyone else, but for me that's a very disappointing revelation. I understand why this may end up being the case but I was very excited about the earlier discussion that a form of "streaming" without affecting our iDevice's permanent memory was going to be added to the iTunes/iCloud mix. I hope that Apple will revert to the earlier model (or at least give users the option to use it), but only time will tell.With this week’s release of iOS 5 beta 7 for Apple’s mobile devices, the company has turned off streaming features in iTunes Match. In the last build, beta 6, iTunes Match users could play music from Apple’s servers while only downloading it to a temporary cache. Now, music played in this way remains in the device’s local library of downloaded tracks. In other words, it’s still technically “streaming,” but since it remains in local storage it isn’t streaming in the sense that most people understand it.
That said, people can still listen to music from iTunes Match immediately, rather than waiting for it to download completely on their phones. The only downside is that since it’s stored locally, you’ll only have access to as much music as your phone has storage space: once you fill that up, you’ll have to go through the process of deleting music you don’t want anymore instead of just streaming directly, the way you could using competing services from Google, Spotify or Amazon.
More here: No more iTunes Match streaming in iOS 5 beta 7 — Apple News, Tips and Reviews