A 3.5bn valuation does seem insane for a service like snapchat without any source of revenue. I did read the other day about their extraordinary growth of sent messages however, (up to 350 million a day!)and perhaps it is simply a premium for said growth.

Regardless, I feel that the ephemeral nature of snapchat is likely to reduce long-term user retention. You have no tangible investment into the platform because everything is deleted.