I have a similar issue so maybe I can explain it better, at least from my perspective. I have a very big library of local files that I play through Apple Music, including lots of playlists there too. This library continues to grow because I'm a CD collector, so I buy CDs then rip them to my MacBook and add them to Apple Music. I pay yearly for iTunes Match so that all of my local files can be played on my phone. In other words, my Apple Music app on my phone is a mirror of what's on my MacBook.
Being a music nut, that's still not enough for me. I use Spotify to play what I don't already own and to discover lots of new music. However, I would love to use Spotify for everything and not have to switch between apps. Sure, I can easily look up an artist that's in my Apple collection on Spotify but I have my library organized a certain way that works for me. What Spotify needs is the equivalent of iTunes Match where it reads all my local files (and playlists) and then adds the streaming equivalent of them to my Spotify library (as opposed to the current Local Files option that creates a separate playlist and is only available when using Spotify on my computer). If Spotify did this, I would dump Apple Music completely. Plus, one day I will probably stop buying CDs (for space reasons) and when that happens I will definitely want one solution for both my local and streaming needs -- one library for all! As it is now, I am considering moving to the full Apple Music subscription since I can then have new music I find mixed with my iTunes Match music. BUT, I prefer Spotify by far, and have a family plan for my kids, so Spotify would be the ideal choice if it did this. I know that many years ago Spotify did something like this (or maybe just synced playlists with iTunes) but then you removed that feature.
Not all of your customers are just streaming lovers. Many of us have CDs and MP3s and would love to have one library on Spotify that combines it all together and is accessible anywhere. Not too much to ask, right? 😉