1. They let you choose any name you want (none of the "real name" stuff)
2. They are very friendly, focused and responsive to the needs of LGBT community
3. No ads (and thus less incentive to data mine the users, one hopes)
4. They simply don't have the history of Facebook and co
5. At least right now they are young, hip and very exclusive with invite-only membership (unlike Facebook that has everyone AND your grandma)
They're new. It's hard to get history yet. That's not a USP unless you're easily bamboozled by the latest shiny.
What special needs does the LGBT community have, that are not being filled by other social networks?
Also, transgender people had some issues with facebook recently. [1]
[1] http://www.cnn.com/2014/09/16/living/facebook-name-policy/
Ello lets somewhat older young people (and probably eventually everyone) chat with and follow their friends, acquaintances, and people they find interesting, without needing to use their real identity or make their private data available to advertisers.
The market definitely exists, but is probably quite a bit smaller than the facebook market, and people have tried and failed to tap it in the past. Its time may have come due to the various real name policy backlashes against other services. It's also very possible that it will run into the same brick wall as everyone else who has tried this has.