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I disagree - I've been using Spotify for a couple of years to discover new music. The 'Related artists' panel, and then the 'Top Hits' easily lets you find similar bands/musicians and sample their most popular songs.

I'd prefer someone to discover a song of mine of Youtube, or read about me in a blog or a Twitter post, and spend the day streaming everything I've done - come to my show and singalong. Looking at listings for my local venue, I'll regularly spend the preceding days / week listening to who's coming to play before I go and see them live.

I'm aware my views differ from some, but we're in an age where you can pirate an album in 30 seconds. Those that are going to steal it, will. Similarly, those that want to pay, will. Until you have enough loyal fans/generic TV/radio coverage to buy your single on iTunes, why not just let them hear it wherever and ask them to donate or buy a t-shirt or vinyl?

Answering the question as to why Spotify isn't paying artists - the system may not be perfect at the minute, but it's certainly pushing the boundaries much better (and more legally) than anything previously. Which is a great, great thing, IMO.