Why has FM radio degraded so much? My feeling is that it has always been a function of the large playlist companies that tell radiostations what they should be airing. There was once a time when DJs decided what to play, but now they can only choose from a list. I can't imagine anything more boring than being a DJ today -- these people are passionate about music, generally have impeccable taste, but have to be essentially robots.
For some time, internet radio has been the only candle in the dark. I normally listen to radioparadise or radioio, but these companies's legal status has been something of a gray area, and I've always believed they're just a court order away from going off the "air", since effectively they're just streaming MP3s, which can just as easily be streamed to disk as played through speakers.
Maybe now that Apple has worked out a compromise with big record labels that seems to be mutually profitable, we can have an alternative. Apple appears to be making money hand-over-fist on their venture, and maybe the shared profits will convince the record companies that ventures like this will increase their market rather than stealing their intellectual property.