When the iTunes Festival launched, streaming media was still in its relative infancy (remember, Google had only bought YouTube the year before). Apple's ultimate goal was to sell more albums. Any video was a perk, and there were no subscriber numbers to worry about. It didn't matter when you bought that live Adele or Oasis album, just so long as you bought it.
In the Apple Music era, it's very different. Apple needs to not only attract new customers, but keep them subscribed in the long term. That means offering a continuous flow of unique content that gives you reasons to come back, and Apple has been doing just that lately. It recently supported individual shows by the likes of Arcade Fire, Haim and Vince Staples, for example. Likewise, Apple is using episodic streaming video shows such as Carpool Karaoke to encourage repeated visits. A big, monolithic music festival doesn't really help at all -- it may attract more short-term attention, but listeners could quickly lose interest once the last artist leaves the stage.