If you want to "do social", do it for small groups. Nobody really has 40 000 friends, so why bother with the use-case that is literally only used by advertising companies?
There are numerous non-company non-celebs-in-the-Hollywood-sense-of-the-word people who have huge followings on Twitter who get a lot of value from that and who their followers also appreciate: people like DHH, John Carmack, Marco, Sam Altman, Scoble..
There is a definite space between "people you know personally" and "blast ads to 2 million customers" in social and Twitter fills it really well.
So you're not wrong, but the people went to Twitter. Even Google killed Reader. I go where my audience is.
So... don't?
RSS is fine for plumbing and pros but has not evolved into anything resembling a user-friendly system.
Twitter has way more features than RSS, but do people really use "favorites" that often? The tweets I "fav'd" I don't really go back and check later, or maybe I'm not the targeted demographic
Twitter is more for information
To be successful, you usually have to do something outside the comfort limits of existing technology.
Twitter innovated by redefining how social interaction works - and then proceeded to slowly grow bloated and cashless.