There are at least two major areas of music composition which the algorythmic attempts fall vastly short of humans.
One is that real music composition is never done where the timbres are separated from the composition. Classically notated music looks kind of like this, but it's really just a shorthand. A composer knows intimately the sounds she is working with.
For pop music, the timbre itself is a mode of creative expression. Innovation in musical timbres and sounds is an expected part of pop music. (I'm using "pop" in the most general sense, covering a large amount of contemporary genres). The meaning of the music is not captured by simplistic reference to musical notation concepts.
The other major limitation of generated music, to my ears, is that of overall compositional structure. The units of composition usually are short, and only locally referenced. So the compositions lack interesting shape over the course of time.
If you think of a composition as a story, it's as if a bunch of plausible paragraph that are coherent within them selves are strung together with only loose reference to each other. So a longer "plot" doesn't emerge.