2) It will only succeed if setting it up is only a tiny bit more difficult than facebook.
3) It will only succeed if a hosting service provides basic plans for say 300M of storage of an automatically set-up account. The idea is its as easy as facebook BUT you own an encrypted account instance which can't be used by the hosting service. The service makes money by people investing 1-10 bucks a month for their super awesome more space service.
I cannot imagine it ever succeeding if these conditions are not met. (1) is an uphill battle, (2) possible, (3) idk what the cost possibility is.
Maybe 1 is not so bad, but when FB started MySpace was not the size of facebook today, and it was sort-of crap. Will people be willing to just leave facebook and their friends and stuff to go to this new service? Its like why people still use AIM today. AIM protocol ain't great, but if your friends are on there, you can't use google talk, because everyone you know is not there.
But yea the article is all about "kids cant succeed" and circular arguments.