I'll add my support to the "don't remove the left panel navigator" crowd. I use many folders of playlists, and use the navigator extensively for them (and rarely to never use "Now Playing" -- I keep the right bar bar completely hidden in fact).
Granted, there might be a new way under the proposed change, but I think that it's important to have that ability still there.
Plus, I use the navigator to drag songs into those playlists, which is easier than right-clicking to add them, especially with a hierarchical setup.
On a usage note, the only other feature I really use in the left panel is the file navigator to play songs from folders. that could easily be moved to a tab.
Have you thought of doing something like the sidebar in LibreOffice? Rather than having it be one giant menu, you could sort of "tabify" the left column. Then each view could be a little more custom. For example, it could have a devices, folder, playlist tab, or you could just shrink it to the side or hide it completely if you don't use those features. Then you could simplify/design each of those views rather than requiring them all to be part of the same "tree structure".
So, you could keep the left view as forms of "library management" type views and leave the center and it's options for content viewing only.