I suppose it depends what you mean by poor tolerances. In the beginning their stuff was pretty bad, but recently it has gotten a lot better.

Here's some pictures of stuff they made a few months ago (large): (jar and lid) http://tinyurl.com/6z2ha8 (coat hook) http://tinyurl.com/5lkhcz (x carriage pieces) http://tinyurl.com/5uq88g

They obviously aren't injection-mold quality, but very usable.

The main problem that the reprap has is dribbling when they are moving the extruder head from place to place. This has become less of a problem lately, as they've made some better valves. Also, getting the right settings for temperature, extrusion rate, and lateral speed have taken time.

At least the reprap community is vibrant, and interested in improving the tool, as compared with the stagnant fab@home.

It will probably never reach "self-replication." You can always come up with another level of "self-sufficiency" that it will not meet. It will however, become a useful tool capable of making some of it's own parts cheaply, and assisting in bootstrapping slightly better versions of itself.