You can see this twin representation conceptually as Artist->Album->Song and also as Compilation->Artist->Song, the latter being a small folder with symlinks to the actual song directly.
It's really just two different trees.
I think that this is extremely important. You mention iTunes, which does its best to pretend that there's no hierarchical file system underlying it. There is, of course, but—ugh, one look at it will make you long for a totally flat file structure.
I think that it's important that any hierarchical-file-system 'killer' actually not replace (or render meaningless), but only supplement, the often-useful hierarchical structure; and it looks like this tool does that.
(In case that looks like an argument, let me say explicitly that I am agreeing with you.)