Hopefully, once Mavericks is released, iTunes will be polished and ready for prime time again.
I'm not holding my breath on that one. The real issue is currently all iDevice syncing is done through iTunes for all content. So you end up with iTunes, which is a great music application, being asked to handle video, apps, and other stuff it wasn't really made for.
iTunes is a horrible video player by feature standards, and Quicktime Player isn't much better. Apple should really write a new video playback app for the Mac if they aren't going to offer a DRM plug-in or something that will allow them to play video purchased from the iTMS on other video appls like VLC. Hey, lets expand the DVD player app to handle other stuff and give it a new name. The DVD player actually has some good controls on it.
Apps could stay in there I guess given how little you interact with them outside the device you use them on. Would actually be cool if there was a Mac/Win "App" programs that handled the organizing and transferring of apps to devices
but also let you use iOS apps on your computer. I mean, it's not going to be an issue with available system resources for processing. They can run in a window the same size as the iPhone display.
Splitting up iTunes functionality into 3-4 smaller apps would be the best move, but it means you now have to open more than one app to change the content synched on your iDevice. That's less convenient, which is why we continue to be stuck with the system we have.
One compromise would be to write a special syncing program that only handles moving content back and forth between the machine the device, but can hook into your iTunes library to get playlists and stuff from it. And then you would only use iTunes for on-computer music playback. Things like apps and stuff you can't use on the computer can be removed from iTunes since it would be handled by the new application.