This is really true. I used to use grooveshark, which is very similar to spotify in terms of functionality, but what it had that spotify lacks is user generated playlists. I find spotify horrible for finding new music, however once you know who you want to listen to its great.
So you don't consider those playlists you can create and share on Spotify as user generated? However I agree that they could be featured more prominently.
Apart from that Grooveshark was a service without legitimate content. As a streaming service you can't rely on user uploads and ignore the whole licensing aspect of the business.