1) Why does everybody makes the assumption that people only want to download the song that is playing on the radio all the time? That is a huge misconception with no basis. In fact, those who download music [to use your example] from so called warez/pirate sources in large amounts, are usually more interested in music and more curious about the rest of the tracks than the average radio listener. Also having 'what they want' it's a mirage if we talk about services like itunes, spotify, etc. A source of content controlled by a commercial entity will never be able to deliver the variety of content that can be found in the wild, the very nature of the concept of 'commercial service' imposes this constraint. I myself was about to sign up for a spotify account when I checked out their catalog and find less than 50% of the music I was looking for. Not that I was surprised.

2)More convenient? For dumb users maybe... for the old school user that like to simply have his/her mp3 collection, I fail to see how itunes is more convenient than say bittorrent, let alone 1-click file hosting.