I don't see any unfunded startup being able to do anything new in this space, Facebook offered interface over Myspace. Diaspora offers control over Facebook - and from this demo they seem to be dispelling the vapour accusations, although we will have to see how it progresses. Google and Twitter currently are offering things and will be offering more in this space also. What real other avenues or general areas do you see a newcomer playing to? Games? Dating? Work collaboration? An even better interface? I don't see many areas for traction. Yes there is probably something I haven't thought of, but I don't think you can place your "bet" on a hypothetical vs these guys with an interesting demo and plenty of money to keep developing, who have hype and who are attacking the most vulnerable privacy/information vector in this market without some reasoning to back it up.
Edit/addendum: I also think these guys rubbed a lot of HN people the wrong way - although I am not accusing you of this necessarily - because they got decent crowd-sourced funding in a seemingly haphazard way. Yes they are young, but if you go back to their pitch it was very slick, and as I said above, this tech demo goes a fair way to dispel the concerns about their youth/inexperience.