> Instead, you have to manually build playlists inside of itunes while "importing" your music (and storing two copies of it) and then transfer those playlists (one by one) to the idevice and ... it's just insane.

This is not completely true. You can store your iTunes collection wherever you like, organized however you like. You don't have to duplicate anything, although it's true that the default is for it to "import" it.

You can also create an "all my music" playlist which you can sync with the iDevice.

I used to have this setup with my music collection on Google Drive (because it didn't fit on my MBP's internal drive) and synced some of it to my iPhone. It worked well enough. The issue was more that all the music couldn't fit on the phone, so I had to pick and choose anyway.

The real gotcha is that iTunes didn't support flac, so I had to convert everything to m4a.