I first noticed this about Pandora when it kept trying to serve me the same song from the newly-released Keep an Eye on the Sky … the Big Star box set. They would only play one track from the 120 or so on the set. I smelled a screwed-up major-label licensing restriction, and I think I'm right.
Spotify, oth, reports 15 million songs. A lot better, right? Still, I and other people have noticed huge holes in its catalog. And that's a self-reported number, as opposed to Pandora's which is a public company and therefore has the SEC looking over its shoulder.
Upshot: Pandora as a radio station is doing basically the same thing FM radio did in the 80s: A&R'ing music for you based on what it thinks you'll like (plus what they can affordably license). Somebody else is still making unholy choices for you, just like the old days of FM. You're only getting the tip of the iceberg in this "algorithm".