There has been significant debate on whether or not iTunes should be allowed in the workplace. Does it decrease or increase performance? As an avid iTunes user I may be biased, but have several example of how iTunes is good for productivity, team building and inspiration.
It adds a sense of individualism and comfort to a workplace that may typically be neither individualistic nor comfortable. I have been employed at some very corporate environments where the ability to be creative and productive is completely hampered by the environment. In these type of places, you will see many working away in their own rhythm with headphones on.
It offers transparency into employees and opens doors for conversational topics. By sharing music via networks, you can browse musical tastes of other employees and listen to what they are listening to. I've opened new doors with somewhat introverted employees by discussing their musical tastes and having that in common with them. Like any other relationship, discussing other people's interests always creates a sense of excitement that enables those relationships to be strengthened.
I do see how sharing music could be a distraction to some employees, but like everything else, it just needs to be kept in moderation. Overall it offers relationship building tools and breaks boundaries between co-workers. Studies have proven that happy employees make for happy workplaces. And happy workplaces correlate to being more productive and successful.