Hi,
My first reaction to your post was that it sounds like a great open source project. I agree with virtually all of your points. And your grammar is better than many of the posts around here. 
Then I started thinking about what an Arduino would need to do to make this happen. I'm not an AVR expert, but I'm very familiar with streaming audio, such as VoIP. Streaming requires managing multiple buffers of audio. I don't believe that the AVR instruction set and the limited RAM resources would make for a good streamer. There are other CPUs that would be a better choice for this application.
Even if you could stream PCM (raw, unencoded audio), I doubt that you'd ever be able to implement a codec for any other format. A streaming device should be able to do this.
Maybe someone with more AVR experience can convince me otherwise. But until then, I'd recommend you find another processor for this project.
Murray