Do I even need to backup iTunes?

Given the "Home Sharing" function within iTunes I can now easily import all my Library onto any new pc (up to the 5 authorized).
In the past I had my Library backup on an External Drive (http://support.apple.com/kb/HT4527).
My question is: do I even need to backup my Library any more? Even of my pc hard disk were to crash/die I can always use "Home Sharing". Unless I am missing something, Apple are now effectively my backup. (I do not quite understand where my actual uploaded files are - I am assuming they are stored remotely within Apple to enable Home Sharing?)
Please note:
My Library is very static - it just contains my original uploads of my cd collection.
I have the latest version of iTunes (11.0.2.25).
I have song purchases in iCloud, but I do not have a paying storage account.
Appreciate any comments.

Unfortunately it never gave me the option to restore from backup. only to do a complete restore to factory. I reconnected the phone to the computer and in the process of doing another restore. this time it actually showed the progress on the iphone screen as opposed to the first run only showing the apple logo on the screen. I believe you may have saved my phone! I will let you know in a few...

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