I've never seen a car with a sound system that didn't have a physical media player (be it tape, CD, DVD, 8-track, whatever). For years now, most aftermarket radios and most factory ones as well have had aux audio in ports, which essentially gives you universal support for pretty much anything that didn't come with your car. It sounds like the Model S doesn't have that either? I really think that if they are going to leave out the CD/DVD player, they should at least have an aux audio in port.
An example of why a simple USB port is possibly not quite good enough would be Ford cars with the Sync system. When you put a thumb drive in, it spends quite some time indexing all the music, which is great once it's in place. But sometimes you want to just take a few new songs or some other temporary audio thing out to the car for a day. You don't really want to switch out the thumb drive as then it will have to re-index everything again, plus you can't easily switch back to your main music collection easily. Better just to throw your temporary audio stuff on a CD and use the CD player for it. If you finish listening to it before your trip is over, you just switch inputs back to your main music on the thumb drive. Easy and effective. (note that a manufacturer could also provide multiple USB slots for multiple drives as another advanced option, though I have never seen that offered to date).
With a Model S, it sounds like you are limited to switching out the thumb drive. Okay, given it's an early adopter car that still has some limits, but nonetheless, a cheap Ford with Sync has a better system. Personally, given how much Tesla has done with the Model S and how great a car it is, I can accept that as a minor limitation, but I wouldn't defend it; not if they don't at least have an aux in port.