I believe it's the first time "i miss Steve".
With the Pandora-like agreement Apple is doing exactly what a Microsfot would do: go where the money is, not where it will be.
Consumers want to have Spotify-like service, and in the end the consumer always win. If Apple doesn't do it, someone else will.
We had complete albums, then iTunes revolutionized the industry with the capability of purchasing single tracks, now Spotify and the likes revolutionize it again with their service, wich is plain better (for 90% of consumers) than purchasing music in iTunes.
I'm not using iTunes since one year, and so is any of my friends who had a chance to try Spotify. They couldn't believe it costed 10$ per month, just as i couldn't believe a song could cost 1$.
Apple should go where the consumers want to be lead, and do it better than competitors. It pays in the long run. The right thing to do is to satisfy and surprise consumers, not one-year forecast of share value.
Why on earth should i ever purchase a song that i listened from "iRadio" for 10% of what i pay to Spotify monthly to listen to it wherever i want whenever i want on whicherever device i want, all perfectly synced, is beyond my mind. And boy, yes i'm an Apple fan.
Trying to go against the tide, against what is better for consumer, might be good for iTunes sales for the next 2 years, but plainly wrong in the long run.
Purchase spotify, integrate it with your ecosystem, make it better rename it and re-invent the music industry again.