"obtaining a blanket license to “re-publish” lyrics online from someone like musiXmatch starts around $20k/year."
Doesn't sound too bad for a company that raised 17M.
Beyond that RG still has a ton of room to expand into other areas.
The question is this: Do the founders wish to be provocative and make a point about the music industry, or do they want to avoid friction? After watching a few interviews with the founding team, I wouldn't be surprised if it was the former.
If you accept that this use does not qualify as fair use then in good conscience you can only display the lyrics for which you have purchased a license. That cripples the coverage you can provide by making it too resource-intensive to seek out a licensing agreement for the lyrics of more obscure songs.