I've created a couple of scripts to work around this limitation using Groups. Instead of Genre, the script allows us to add/remove group to the "Grouping" field in the song, which is mainly unused. As an example, a song may fall into Remix, Dance and HipHop categories. We can manually create playlists for all the three and add the song to that. However, if we wish to create a new playlist, which contains all the songs of Dance and HipHop categories, then it's not easy to do manually. It becomes more complicated when we add a new song to Dance category, we have to remember to update our new playlist also.
To achieve this result, however, you can use this script to "Add" a group to the selected song(s). Once proper groups have been added, "Smart Playlists" can be generated that contain these categories. Also, a single group can also be removed from the selected songs without modifying other groups.
[robg adds: I downloaded and tested the scripts; they work as described here. I don't do much with grouping music using Genres (Smart Playlist -> Not Recently Played is my usual mode of listening), but if you do, this unused field and these scripts could come in handy.]

