My guess: it's a control issue. Direct license deals can be done behind closed doors, and that privacy is worth a lot in controlling other negotiations.

When any guy off the street can pay $0.005 or whatever to stream your content, your bargaining position is already compromised, because the guy has an alternative to negotiating with you at all.

With a direct deal, you could employ all kinds of strategies. Charge different rates for different songs. Give discounts to some players. Keep the contract short-lived to keep them coming back. I think a lot of that goes out of the window with compulsory licensing.

Full disclosure: I work for Pandora, but am speaking more from my days as a "promoter".