Apple has shown no fear of rethinking and innovating with the user interfaces that manage our own personal data. Both the iMovie and iPhoto apps are great examples of this: they’ve gotten much simpler to use over the years (especially as they’ve moved to the iOS platform.)
This makes me think that there may be another factor that’s holding back iTunes; and I fear that it’s contractual.
Much of iTunes functionality is based around content that Apple or the user doesn’t own. And as we all know, the media companies that own the content are particularly paranoid about how digital assets are managed. In the 10+ years that iTunes has been in existence, I’m sure there’s a tangled web of legal obligations that makes improvements a huge technical headache.
To give you an idea of how painful this must be, imagine being a developer at Apple and having to consult this before implementing or improving a feature in iTunes. And when you’re done wrapping your head around those conditions, make sure you have thought about restrictions in other parts of the world. Having fun yet?