Yeah I think not all people having an internet connection is a pretty serious issue to an otherwise pretty reasonable suggestion.

Apart from the internet connection requirement, and the requirement to download craploads of songs. I think it could be a good idea.

That is an okay idea...though you mean "won't necessarily like every song on the disc" right? That part threw me off. The problem with all of these ideas is that Internet connection is not mandatory and many people still do not have it. Otherwise, a variation of this idea could be used, sure.

" I was just listening to last weeks bombcast and I had an idea when they were talking about Guitar Hero 5 and The Beatles; Rock Band and how that people who buy a game in either franchise won't necessarily like every game on the disc. So I was thinking a good alternative would be a bundle where you could get all the instruments as well as a code instead of all the songs on the disc allowing you to download 60-70 songs, or however many would be in the game, from their online store. This way people would be able to get all the instruments and then be able to fully customise their track lists to their liking. Or they could just buy the downlaod code if they already have the instruments. Obviously only people with internet connection would be able to use this so it isn't a perfect alternative. "

You heard it here first, folks!

A simpler way to have something like this implemented would be to just have an option in the game that allows you to turn off certain songs. It could one of the extras (i.e., like breakneck speed, select a venue, etc.), and you just build the setlist to your liking and turn it on. The list could be saved to your profile.
 
However, this would conflict with online play and World Tour mode. Online because there's a lot of people already out there with only the on disc songs and no downloads, and with an option like this they'd have even fewer songs to choose from, so the people playing with someone with 20 songs turned off would probably leave the session in a heartbeat. There's also the occasional asshat who would just turn off all songs but one. World Tour wouldn't be fair because someone could turn off all of the difficult songs just so they could keep gold starring easy songs to get more and more fans/stars. There'd have to be something to regulate this, like your band won't be on the leaderboards or you can only advance to a certain point in the career.

I wouldn't really want all those songs stored on my hard drive, though.

I like this idea a lot. The thing is that typically I just play quick play mode in order to have that customized experience. I believe Rock Band Beatles has all the songs unlocked at the start. I think this would be great in every game along with the ability to turn off the songs you don't like.

one thing I would fucking love is to be able to play all my rockband DLC songs without the rockband disc 
you know right from the XMB click the song you want to play and play it and be done with it 
because alot of times I think I wanna play that song but only want to play that song so its not worth the hassle of put in the disc  
and I put in the disc I should play more than one song

yeah one of the things i always admired about the 360 was after you imported your rock band 1 songs you could go through and delete ones you  dont want...i wish you could do that on the ps3.   
 
But your idea sounds fairly plausible after working past the problems others have mentioned.