The real reason is likely international licensing fees, which led Pandora to pull the plug on international users back in 2007. Itâ(TM)s unfortunate for users outside of Last.fmâ(TM)s top countries, but likely a necessary move to continue to provide sustainable service, even though the outfit is now owned by media conglomerate CBS.
If they aren't making enough money to cover their outgoings, whether that is licensing fees hosting or anything else, then I don't see this as such a bad thing. It is more sensible than trying to cram an advert in every corner and going under (or rather being wound down by the parent) anyway. It would be nice if this kind of service could be provided for free, but with licensing deals being as they are it might simply not be feasible.
I find you lack of faith in the forth dithturbing. - Darse ("Darth") Vader