iTunes needs a complete rewrite.
If all you're doing is buying a song or app and then syncing it, iTunes is fine. For some managing of files, such as MP3's you ripped off CD's, iTunes is also fine.
Occasionally when I need to do something off of the beaten path like manually manage my apps on a device from iTunes performance takes a huge huge nosedive. One such case is when I am connecting a new mobile device and I want to manually select what apps gets synced from iTunes to the mobile device. Performance is not just bad, it's unacceptable.
Not to mention the occasional times when iTunes becomes unresponsive while browsing the app store or music store and I have to manually kill the app. This used to happen on a weekly basis. Browsing the app store could also be quicker. I mean, in many ways the iTune is just a glorified customized web browser. Considering that, the performance really should be a lot quicker.
iTunes is functional. I actually think the overall design is very good. There's certainly nothing inherently wrong with how it syncs and manages your apps and music to a device. Though it could use a few upgrades here and there. It does need a complete rewrite for speed and stability reasons.
I actually like iTunes, but it has definitely become bloated - especially on Windows. Totally agree with your post here. They need to do a complete revamp, like Adobe did with Acrobat. Acrobat got feature creep and turned uber bloated and I ended up using Foxit Reader for a long time, unless the last rev or two of the reader came out and it's back to zippy again. iTunes is really a database viewer for your music, so why the bloat, Apple?
If Apple jumps into the cloud, that may be the ideal method for everything - music, movies, apps, and so on, with local caching. I've been demoing
Mog for the past week and have REALLY been enjoying it - streaming songs with local caching so I don't have to be 3G-connected to listen to songs in my car or inside a building, the entire library is there, and just ten bucks a month. Between that and Netflix, I have all of my movie/music needs covered for under $20/mo.