Well, FLAC isn't supported by iTunes, so that's a showstopper already. Second, though I have an iPod classic I have a different portable player that will be replacing it in the near future, thus I won't interface with it through iTunes. The player combines internal and SDXC storage and the space savings of a lossy encode allow for me to have way more music on the go. Given that I have a large amount of music and the player itself will be able to hold quite a lot (~300GB) I don't want to deal with very long processes of re-converting and re-syncing, particularly given that I like the lossy encodes to still be near transparent and I'd like to throw in an iZotope VST for resampling and dithering.
Additionally, if MC already offers MP3 and every Mac has the ideal AAC encoder already installed...why not? It's not an obscure format. The ALAC encoder is already implemented.
EDIT: To clarify, the goal is that I can periodically Select All in my library, tell it to convert, MC will skip the already-converted, and the next time I plug in my portable player I'll be able to sync it. This is in contrast to needing to open XLD or similar, check what the last batch I converted was, then pick everything I've added since then, set destination etc.
