Ah Meself! Making it through the wintry weather I hope. Yes, you're missing a couple of things but at the end of the day "he can simply cancel his arrangement with CDbaby, without penalty" as you so aptly put it. One example would be the bar code they offer. It's an excellent deal but actually belongs to them in a roundabout way.
If you were to use that bar code on your album and then place it in a store, they can trace that and would be entitled to a small percentage. Same goes for their "card swiper". They take a percentage of the sale. Still a fair deal though.