Back in about 2007-2008 sometime I was given an invite to Spotify, when it was still very much in stealth mode. In Stockholm at the time it was the talk of the town in hip web agency circles, and the question of why it wasn't a publicly available product tended to come up. Someone told me that the main reason they were in stealth mode still, despite having a pretty solid product at the time, was that the entire library of music was ripped off of CDs and not licensed, and they were working towards getting the labels on board.

The explanation made sense to me and would support your point of view, but sadly I don't know if it's actually true as I heard it from someone not actually working for Spotify.