I agree with the user who said we should have the option to save files only in the iCloud, or both the iCloud and the local drive. Not all other cloud services work like this. First of all, Apple doesn't make it clear that this is how it functions. I spent a great deal of time confused, annoyed, and frustrated because of hard drive issues.
Second, this makes iCloud useful ONLY to people who want to have a duplicate backup of the files on their computer, NOT to people who wish to use the service as additional offline storage. That's the reason I have been paying for more storage with iCloud. I needed to be able to offload files from my hard drive. Instead, I've been paying for nothing more than what I have with my external Time Machine drive. Duh.
I remember the time when Apple was brilliant with their development of interface and usability issues. Now they're becoming like Microsoft was during the years when they were under fire for monopolizing the industry and forcing customers to use their products. I'm even more annoyed with this because of the amount of time I have spent being frustrated and confused about how iCloud was working.
Another issue with iCloud is that when you copy files from the computer to the iCloud, it doesn't make it clear that it's first moving them to that hidden local drive, then copying them to the iCloud. I understand that can only go as fast as your connection speed allows, but it's not clear. Two issues arise from this. One is that you can get an error message that there is not enough room to copy the files to the iCloud. It's the space on your computer that's filled up, not the iCloud. Two, your files are not readily available from another computer (on or off the same LAN) until they're all copied. And if the originating computer goes to sleep, the files stop copying. Not knowing this, I had a disaster during an important client meeting when my files were not available and there was nothing I could do until I got back to my studio.
I'll be cancelling my monthly subscription to iCloud. Perhaps if Apple shows some foresight and changes how the iCloud works, I may renew my subscription, but not until then. For a fraction of the cost I pay over several months, I can get a huge external drive and set up my own "cloud". I should have done that in the beginning!