iTunes Radio matters for a number of reasons. It adds value to an alreadyworth it $25 a year: iTunes Match. I have been using that for about a year now to access my long forgotten MP3 library from any of my computers or iOS devices. The missing link has been variety and that's why I've been a fan of Spotify, Pandora, Slacker and a few Shoutcast stations.
iTunes Radio interrupts those services in my life because of a pretty killer feature: being able to stream the music out to my entire house like a Sonos system. Using AirPort routers and a mixture of amplified speakers around my place, I can adjust volume and turn on and off each set individually from the desktop. Doing this with Spotify or Pandora required the purchase of AirFoil, a $25 plugin for MacOS.
Adding access to the service on AppleTV through a firmware update is now possible.
Plus, access to all of my own music, and the option to buy super awesome songs on impulse with a couple of clicks. I'm holding off on that for at least a month, just to see how repetitive things get. At $1-$1.30, the songs aren't exactly cheap.
My MP3 collection is around 11,000 songs. Not even half of the 25,000 song limit. My library would be larger if it weren't for streaming music. I won't be surprised to see my library grow because of the ease of purchase added, but at a buck a song, I'm not going to be growing very often. I haven't spent much time with Amazon MP3, and I find the integration with my devices to be superior to Google Music.
Do I think iTunes is a bloated whale of an app? Not compared to running a Flash based stream, no. Compared to Winamp 2.95, yes.
If you're looking for a station to get started, I recommend "Guest DJ: Diplo".