Ill try and make this as brief as possible.
It gives boundaries to areas artists can dabble in. It prohibits us from executing our art in a more profound way. I have discovered this while trying to start picking up my music video for Valentines day and working on it again. The whole inspiration for the cartoon came when I was listening to the song "She's only Seventeen" by Winger.
http://www.youtube.com/watch?v=GlN3oEj MpUQ
I found this song to be pretty outrageously funny and wondered "what if I just took the idea and took that unacceptable idea of seducing a minor to a different level?" So I was making a valentines cartoon where an elderly man essentially tries to get in this 17 year olds pantaloons. It gets worse from there but I'll save that for later.
If I try and use music from the audio portal, it will seem more like that unknown song was tailored for my flash rather than the other way around. It will no longer be a concept revolving around the actual song as was part my intention. Instead the audio portal song would revolve around my visuals. It messes the whole cartoon up.
Now I used to believe you could use licensed material so long as you weren't profiting from it. But I've heard stories where Tom Fulp had to fight old Newgrounds cartoons from copyright claims. These cartoons recieved absolutely no money for their toons from anyone. So I'm in between a rock and a hard place and because of this, might not be able to finish this cartoon.
**edit** I've been thinking, is there anyway to circumvent it by having the music play on youtube while simultaneously playing my flash? Any way to program it so when the youtube video reaches a certain marker (the music starts playing) i will cause my flash to play? I'm no programmer so I don't know if somethin like this is possible