There are quite common things which are impossible or rather clumsy to do with folders, for example produce a view by specific composers then a view by performers. Can not be done with folders unless suffer large amount of duplicates.
If you listen to your music in a rigid way where folders works fine then obviously iTunes and other music management software are of no use to you. But you are not typical.
Maybe not that specific example, but the situation of listening to Indian film music is a classic case of folders being 100% inadequate.
Any given Indian movie corresponds to an 'album' of songs. However, each song can in the album have a different set of artistes associated with it. Hell, sometimes there are multiple composers within the same movie's soundtrack. And Indian movie soundtracks are more tightly coupled than "Western" movie OST albums, so you can't just treat them as an independent collection of songs either. (Indians typically identify songs first with the movies they appeared in, rather than the composer or performer)
Basically, a majority of Indian movies are musicals - and a simple folder structure is just not enough to deal with such a collection of music!
I don't understand... do you not typically want to listen to the soundtrack in the order it was in the movie (that is, exactly the case in which a single folder for the soundtrack excels)? If not, how?
If you are into pop music, there are easy examples as well. Sometimes I need all the dance music, other times I only want dance music that are retro, or dance music from certain group etc. Folders will never be as flexible.
If you listen to your music in a rigid way where folders works fine then obviously iTunes and other music management software are of no use to you. But you are not typical.