Don't have anything substantial to add, just commenting after watching videos from Leipzig. Had this kind of game been around when my sisters and cousins were doing almost all of our gaming together (from 1981 to 1997, all of us somewhere between elementary and college age at a given instant), I think we'd have played Rock Band a majority of the time.
The price tag is tough to swallow, but you would be rewarded many times over provided you've got 2-3 others to jam with. I was in a couple garage bands in high school simply for the thrill of jamming and everybody being on the same page at the same time. It would have been neat to share that with family via gaming, though we had our own multiplayer fun.
And I agree that on-line coop won't be that great. It's terrific that they're thinking about extending the co-op experience to online, but this is one case where I doubt that it will fit well. Everybody's got to be cramped together in the same space, knocking things over in the living room.