Overwhelmed by the barrage of web services?

Everyday, we see one or more new startups announcing the launch of one or more web services. I assume most of us take a look at the service but do not actively use it, at least at first.

I am interested in getting your opinions on the following points

a) Is the web/Internet space becoming too saturated?

b) If yes for a), how do you think new startups will be affected? Programs like YC?

c) What web services do you use regularly? What do you like about them?