If you just need a free text editor that works well with source code, why not Vim or Emacs? With the right plugin (or a terminal) it probably integrates better with what you're doing than Atom-- excepting React Native with their Atom plugin.
If you're willing to pay, why not JetBrains or Sublime?
I just don't understand the middle ground that Atom seems to exist in. What is it best at?
Some people just want a free Sublime clone.
Nothing, but it doesn't have to be. It's pretty good at most things, terrible at nothing, has a very shallow learning curve, comes with a pretty sane default setup, lots of useful plugins and is easy to configure.
2. Really fast release scedule. While this may trade of some stability here and there, it cetainly adds new features quicker than Sublime or Vim (AFAIK).
--If you're willing to pay, why not JetBrains or Sublime?
3. Why should you pay for other Editors if you don't have to with atom? :D I'm a CS student and a lot of people I know are using atom because they can't afford/ are not willing to pay ~50 bucks for an IDE/ text editor.
Learning to use vim and emacs requires large effort, and customizing them requires learning languages/apis that are not useful for anything else and are not interesting.
That's why many people prefer to endure some slowness, but use something with nice ui and based on web tech they know and love.