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iTunes match is on but I can't copy songs already downloaded to my PC to my iphone without redownloading them on my iphone from the cloud. Is this by design or am I missing something. Seems like an odd thing.

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It's by design. iTunes Match will upload (or match) your songs with your iCloud. They will show up on any other device (up to 10 devices) where you've enabled iTunes Match. But in order to play the song on your other device, it needs to be downloaded (or at least streamed).
Which is kind of obvious, since you can't play a song out of nowhere. So your iPhone will stream (or download, depending on what you choose) the song and than play it. It will even start playing before it finished downloading the song.

You can find more information about iTunes Match and the working process behind on this website.

0

This is even more frustrating if you songs are more than 256k because when match gives them to your other devices, they are 256k

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