Sounds good and the shift in direction makes sense to me.
My only concern is this:
We will not add the ability to plug-in other library sources in the 1.0 release, but the UI changes will keep that in mind for the future.
It could be an issue to not have a replacement Library API for the 1.0 release. I assume that would mean the existing storage plugin/API will have to be supported for any new Library changes. The existing plugin probably won't scale to support the multi-source library scenario: so the new library could quickly get convoluted having to deal with the new Library API and the legacy Storage API.
I started to create a custom storage plugin that allowed me to keep my Library in Dropbox, while the rest of the storage was handled either in local files (for dev) or Redis (for production), but it quickly became more complicated than it was worth due to flow and user things being mixed with the library storage. It seems like pre-1.0 would be the best time to split the Library API from the rest of the Storage API.