Apple is not going to kill anything unless they suddenly learned how to make competent software for non-Apple devices.
I suspect the main thing that will limit Apple's streaming service is availability: iTunes Radio is only available in the US and Australia. I think they're being punished a bit by the record labels, after Apple took over the digital downloads market, much to their displeasure.
That said, if Apple's streaming service comes to the UK, I know I'll drop Spotify in a heartbeat. I couldn't be more disloyal to Spotify: I only use them because they're the only service with the exact combination of features I need (besides Rdio, who I don't use because their desktop app is - incredibly - even worse than Spotify's).