If you look carefully, you will notice that there are a number of services on Google's website are beta. They are known for having products that have very, very long beta cycles. Long beta cycles is becoming very common with software these days
gmail is just an e-mail service, that's true. It was also one of the only services to provide the 1 gig storage at the time. Pretty much everyone else was 10 meg storage limit e-mail addresses. So you have a portable e-mail account that you do not have to delete anything with.
Add to that the fact that gmail comes with built in spam filtering tools which aren't half bad. Plus, the service has the search engine as the backbone and allows you to search through all your e-mail crap.
The only thing I don't like is that their technology looks at the content of your e-mail. Privacy watchgroups are hounding on Google because they do not worry about a user's privacy. Watch out for google toolbar if you have it. Whether you want it to or not, it'll update itself. They are also not big on third party programs for their gmail service, which was shown when third party 'new e-mail' alert programs were blocked from using gmail's service.
There was also the exclusive thing about the beta testing, where you had to be invited in the beginning. The invites were rare enough that people tried to auction them off and stuff. Now people have so many of them they don't know what to do with 'em. Plus, you can't get more until you get rid of the ones you have.
Personally, I don't like the service. I prefer my personal domain one, even if I get a spam e-mail every once in a while. If it becomes a big deal, then I can use built in filtering for any number of free e-mail clients which will also display the e-mails in text based format so I don't have to worry about being tracked or any bugs getting through.