Exactly. MUNI (SF's bus service) is by many measures irresponsible, incompetent, and corrupt. It even runs a late a lot.
But the density of the city simply creates such a high frequency of buses, and coverage of routes, that it results in a very practical, pragmatic service to use.
Even really well off people often don't have cars in SF just because having a car is more of a hassle than taking the bus/BART/extremely occasional cab.
We know from Paul's blog (awesome blog, Paul!) that he really likes cars. When even he is thinking of ditching it, it says a lot about the service.
Sidebar: I currently live in Portland, which has an award-winning bus/rail service. And it is true, it's awesome. The drivers are polite, and often really care about urban planning/civic stuff. The buses are clean, the documentation/data/maps/API well-done.
But because Portland is so much less dense than SF, it still means that in many cases, taking a bus here is more of a drag, and cars more common. (On a personal note, I've gotten way more into biking since moving here from SF.)