GAE's main customer is Google itself as far as I know, so I don't think they have any problems with traction. They certainty aren't priced or have the features necessary to get much traction outside Google at any rate.
They're a premium service with very harsh restrictions and poor portability. I gave them a try for awhile, but ultimately they have too many drawbacks and have been plagued with terrible issues such as 20sec+ start up times on GAE/Java. It's just not a great option considering you can get the same performance as ~50 GAE instances with a single dedicated host at 2-4 order of magnitude less cost.
AppScale itself is pretty interesting though, but without the Google Bigtable backend, most of the forced restrictions don't make much sense and actually decrease performance and reliability compared to just developing for a linux VM directly.