Might I ask why you think the Android Music app is bad? From what I can tell, it's nearly identical to the iPod app on iP* (it's more awkward getting back to your library from the Now Playing screen, but that's all).
The interface just isn't as nice overall. It gets the job done, but it's not as intuitive or pretty as the iPhone's player.
Also, the vast majority of people have their music in iTunes. The fact that they can't just plug in the device and tell iTunes to sync might be a turnoff
anecdote: friends and family have spent at least 20 thousand dollars on music in itunes. The people who even know alternatives exist are only tech people and they don't spend much money on music.
Also, the vast majority of people have their music in iTunes. The fact that they can't just plug in the device and tell iTunes to sync might be a turnoff