Well, of course: Facebook started by serving a specific niche (campus social life) that was very large, but that no social networking site specifically focused on. By doing so, it built critical mass quickly.

Lots of new social networking sites are starting these days focusing on specific niches, and they're very useful within those niches. And then there's ning and its ilk, which are "meta-niche" social network sites.

There are also still a number of very large unserved niches that create openings for new Facebook-like social network sites. (I'm actually kicking around the idea of going for one of those that I happen to be very familiar with)