Does iTunes Match work with iOS8 Family Sharing?
No. This Apple support document details what can and cannot be shared with family sharing. In particular, there is a list of items that cannot be shared:


  There are a few things that you can't share:
  
  
  Songs added to iTunes Match from outside the iTunes Store
  In-App Purchases
  Items that are no longer available on the iTunes Store
  Items that were hidden
  Apps that aren't shareable
  


We still don't know how many apps will opt-out of being shareable. So this "few things" could end up being many things.

You could alternately describe the above list as Things That Can Be Shared Only With a shared iTunes Account.

So if you want maximum media sharing between adults, but still want to use Family Sharing for restricting children and/or for its non-media features (photo sharing, location sharing, calendars, etc.), then the best compromise seems to be:


Define one Apple ID (the "ownership ID") to be used only for media purchases, for iTunes Match, etc.. Adults use this Apple ID only for logging into the iTunes Store and the App Store.
Create an individual personal Apple ID for every adult and child. Everyone uses their personal ID for iCloud, Messages, and other personal services.
If you want to restrict children, then children also use their personal accounts for iTunes (which means they don't get iTunes Match and other non-shareable media, but they do get restricted sharing and purchasing via Family Sharing)
The ownership account or an adult's personal account configures itself as the family organizer, and invites all the other accounts to the family.


I believe this configuration achieves the following effect:


Adults get unrestricted sharing via logging into iTunes with the ownership account
Children can get restricted sharing/purchasing via Family sharing
Everyone gets private messaging and doc-sharing via their personal IDs
Future purchases by adults are owned by the ownership account, diminishing fragmentation (unlike purchases by children, which will be owned by the child's account, paid for by the ownership account, and shareable only as far as allowed by family sharing)


How to decide whether to use the ownership account or an adult personal ID to be the family organizer? I don't know. It seems pretty equivalent to me. One difference is that, if you use an adult personal account as the family organizer, then you have to duplicate payment information in the ownership account and in that individual's personal account.