Yes it has a stupid name, yes it has fewer users than twitter/facebook, and yes it's hard to articulate to your non-tech friends why they should spend $36/year on this. But it's becoming a pretty positive place to hang out, and most of the people I care about listening to are there.
In practical terms, this file API means that if you want to post a picture you don't have to use yet another here-today-gone-tomorrow photo sharing service with no revenue model, which I would hope means there's a better chance of your photos sticking around permanently (or at least as permanently as anything ever gets on the web).