It shouldn't affect your ability to playback DRM protected music from iTunes. And the reason they're withdrawing from these markets is because of the iPod Touch. It has cannibalised their iPod sales because it has access to the app store and iOS. So the iPod Touch offers kids access to over a million games.
Personally I'm sad to see all the classic era iPods go, I felt that had Apple invested in a great DAC for the iPod Classic, added FLAC support (and not just ALAC) and also increased storage density (320GB option woulda been great) it would have sold well with audiophiles.
Instead they are going the opposite direction by removing the headphone jack entirely on the new iPhone which obviously is a slippery slope. I wouldn't be surprised if the next iPod Touch did away with the headphone jack and instead included Lightning head phones like the iPhone does.
Good news though, there are plenty of other good iPod replacements for those of us who want FLAC and great DACs.