I could talk about specifics, but it really doesn't matter. Many people don't like iTunes, and I know personally it works better on Mac than on PC, but that is all besides the point.
Bottom line is that we have to start by saying that before iTunes, there was essentially no digital music available to buy (and by 'none' I mean very little, scattered, and expensive). Record companies were pulling into their shells and piracy was rampant.
iTunes saved the music industry (we can debate whether much of it was worth saving another time). But as always, the greedy record companies demanded concessions - to allow for $0.99 songs, they demanded DRM and a music player system that was protected and encrypted.
When record companies saw how powerful Apple was becoming - in other words, they saw that they couldn't raise prices - they started offering DRM-free deals to others like Amazon ... and leveraged that to force Apple to let them raise prices, which has led to widespread price increases. The industry said that only new releases would be higher priced, older stuff would drop to $0.69 and the mean price would remain at $1 a song ... but *everything* my kids buy is $1.29 and even 'What a wonderful world', a 43-year old Satchmo song was raised to $1.29!
And THAT is how we ended up moving from open hard-drive systems (heck, I had one of the first hard drive systems from Archos and it was like navigating a PC to play music and everything was manual load!) to encrypted systems. No one else has even close to the market share of Apple in both music and hardware, and therefore they are both a leader and a target.
As for iTunes, I very much agree that they should have a fully optioned out install, allowing someone who just wants to sync music to have a iTunes-lite, then add Quicktime, the store, App support, Bonjour (which Adobe force-installs as well ... and I have to constantly remove from my work PC!), and so on as needed.