Okay, the way I understand it is this: The software is NOT cloud based, there's just some cloud-based features included. The software will still be installed on your hard drive just like before and you will not need an internet connection to use it. With the subscription you will get all the new features as soon as they come out, rather then getting bundled updates every 18-24 months like in their previous update schedule. So, for example, lets say they come out with an improvement to brush stabilization in photoshop. You can get that as soon as it comes out rather than waiting for months and then getting a huge bundle of updates that include the new stabilization function.

As for paying it, it is basically a rental system. You pay for it, you can use it. You don't, you can't. They will continue to support CS6 with bug and security hole repair, and will make sure it will work with the next versions of windows and Mac OS, but they will no longer be developing new features for it.

Yeah, it is pretty ridiculous.

I'm going to give it a shot, but only because I'll get it free through my school.