The difference with a backup hard drive is that it's dedicated to music. No one wants to share their backup hard drive, but they might share or even sell their MP3 player. The legit use for the MP3 player is probably legally safe, but things can get gray quickly.

Since this particular MP3 player can only hold MP3s, not arbitrary files, they should be required to implement a self distruct feature, even though a device that could store MP3s and files shouldn't need one.