I was also disappointed that this option was removed. However, there is a way around it! If you play your playlist, when it reaches the end it starts playing a 'playlist radio'! Hope they bring the old functionality back though.
100% of the time I come to this forum searching for answers relating to a feature I used to use and can't find any more; 100% of the time it has been discovered that Spotify just removed the feature. I would LOVE to know why; why, and HOW, spotify devs actually remove more features than they add? Perhaps I just don't know about the new features. Maybe i would if they offered a changelog.
Regardless, I've decided to start a tag campaign to track these incidents, if for no other reason than exhibit A on why I would not recommend spotify to friends. Feel free to join:
#spotifycollapse = general company failure,campaign trackinghash tag
#featureremoval = the main reason for my rage.
There may be others, for other issues needing tracked