When Apple bought Lala they did more than remove a future competitor. They removed a platform from the board that was making Flash (Lala used a flash interface) a relevant technology for some users. The also removed Google's best music search partner from the board. Both of the previous were potential channels where Apple could lose sales.

This is just tinfoil hat speculation, I don't have anything to back it up. However, this is the way that high level, powerful executives and a certain class of start-up founder think about markets.