1- If the stereo album does not have a distinct center, I personally don't think that there's anything wrong in a surround conversion that also doesn't have a discrete center channel; it's all about the end result: if you get a satisfying sound field, who cares how many playback channels are actually in use?
I've heard convincing surround from one center plus 2 back channels, no front L and R...
2- The Soundfield mic and associated Ambisonics encoding/decoding works quite OK for the recording of live events; but restricting the creation of new music to just the front soundstage, leaving the rest of the sound field for ambience only, IMHO is akin to calling electric and electronic instruments "unnatural" and thus restricting one's listening habits to purely acoustic music.
Besides, there's plenty of examples of music that was created from the get-go to envelope the listener; church organs are but one example, and there are classical pieces written with instruments (including choir) around and behind the listening area.
Modern live worship music is making strong use of surround, quite a few large temples have speakers set on the sides, behind, above and even in the middle of the seating area, and the live sound mix is tailored to "elevate" the listeners, enveloping them in the music to cause a stronger emotional impact.
This is similar to what happened in many old European churches: not only the organ had pipes all around the church, but the choir was divided in sections placed in different parts; one common arrangement was having the choir on each side and the organ pipes at the front and back.
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