In what way are they second class? I actually feel the opposite way, because I can use only uploaded/matched tracks in apps like Djay, Capo or GarageBand.
First things that come to mind is they don't come up in the default search (you have to manually toggle to a separate search of your library), and also they don't show up in the web player at all.
Oh that's unfortunate. I remember when you used to be able to share your whole iTunes library with people over the network, possibly even over the internet?