This is a bit like going to a Christian forum and asking "What's the big deal with Jesus anyways?", or an accounting forum and saying "What's the big deal with debits and credits anyways?". You're only seeing "hype" because you're looking for it where it's strongest. My parents never talk about startups. Nor do my siblings. My girlfriend doesn't other than curiousity about my own experience. My friends generally don't. My online friends from video games don't.

If you think you're in an echo chamber, step outside. It will likely do you some good, especially re: startups.

Early Scribd broke the web by taking open format documents, putting them in a proprietary wrapper, and calling it a "service".

Middle Scribd fixed their own brokenness by moving to HTML 5 (which is sometimes more convenient than a PDF, and is certainly "open" and accessible).

Late Scribd is again breaking the web by moving documents behind a paywall. Some qualities are just baked into a company's DNA.

I think there are a few takeaways here:

* You have to charge from the very beginning. If you start a free service, and then try to establish a pay system afterward, your users will feel tricked and trapped and they will rebel loudly. Scribd seems to have been in a hurry to get adoption, so they made it free to host documents; as this guy said though, he much preferred hosting with Scribd over doing it manually on his university's web server. That could have been Scribd's value proposition, and a small yearly fee for that probably would have worked OK.

* SaaS could get itself in trouble if there are too many incidents like this. I already hear from clients that are concerned about using online services; the most common questions are, "What if they change their terms?", "What if they go away?", and those are legitimate concerns. Many of my clients aren't the most computer-interested people, so if they have concerns like that, then that means that stories like this have penetrated very deep into the consumer market.

This works both ways.

I have looked at other people's code and screamed, "Who wrote this &%*$^#?!?!?"

Unfortunately, half the time it's my own.