In spite of the logic which might dictate the expression as a positive comparative qualifier, to describe something or someone as "better than Radiohead" is a vicious and vitriolic insult, and is both used and taken as such when it is correctly communicated. Such a phrase is a good example of language as a system higher than logic, and illustrates the difference in words as a Markovian chain of single-minded unambiguous ideas and words as phrases, which as a whole can drastically alter each word and its conventional meaning as components through the meta-mechanics of language.
The expression is most obviously compared to its counterpart, "worse than Radiohead." While the idea of an object, system, or idea actually being qualitatively worse than Radiohead carries a daunting magnitude in its own right, it is still to be taken with less offense than being called better than Radiohead. The difference lies in the comparison itself, which in the instance of this expression is implicit. To be called worse is a dispassionate, albeit unfortunate qualifier. It is ultimately a neutral description, to which the most appropriate reaction is sympathy for observing or sharing an instance of something so godforsaken as to be worse than Radiohead. To be called better, however, is to imply Radiohead as a viable benchmark of comparison. To hold something in a comparative light with a point of reference at such a low and distasteful threshold of human accomplishment as Radiohead is a vile, obscene, and definitively non-neutral charge.
If it's still unclear, there is nothing wrong with inherently being better than Radiohead. To be better than Radiohead is a natural consequence of most things consisting of matter, as basic and as reasonable an expectation as being affected by gravity. Most instances of things which don't meet this qualicteristic should be scorned and ostracized with alarm and high prejudice. But to be actually acknowledged as better than Radiohead when the comparison is not obvious or warranted, which it never is, is to imply the instances of things which are worse.
It's as if I were to say that I am typing this text with unsevered fingers. Such a fact is obvious and indisputable, but to mention it with no clear basis is to draw upon the existence of fingers which are severed. The comparison is drawn through negation, and is likely to bring about the discomfort and insecurity of the possibility of severed fingers, but without the satisfaction of having a literal object or instance of severed fingers to observe, contemplate, and accept. Is the unseen implication that is drawn based on logic? No. No, it is not.
Examples of things that are worse than Radiohead:
rape, war, methamphetamines, auto tune, etc., all those serious bad things that we'd rather ignore if we could afford to
Examples of things that are better than Radiohead:
the Police (no, not the band)
the designated hitter rule
Tommy Wiseau's The Room
As far as I can tell, the expression originates from a last.fm tag. Even though both the musical examples given in the tag, and the description of the tag (likely given by someone with moderation or administration privileges who cannot (openly) acknowledge Radiohead as an abominable cultural anchor) do not follow the way the expression is described in this writeup, we cannot fault the source for being incorrect as compared to the phrase's current implication. Such is the nature of language. Etymology versus evolution, denotation versus connotation, logic versus culture.
In the unlikely instance of something existing which is both worse than Radiohead and deserving of the derision brought about in the comparison of being called better than Radiohead, there is the phrase "not even better than Radiohead." This is an extraordinarily dangerous phrase, which should probably not be uttered by anyone, even in truth, unless they are intent on instigating a war. A literal war.