1. "You're supposed to handle exceptions from the datastore? Really?" — Are you saying you don't handle exceptions when your regular relational database throws them? I've seen Sybase and MySQL blow up with depressing regularity, and have had to write exception-recovery code for them.
2. "No https with a domain?" — What stops you from making https://<your-app>.appspot.com the handler for forms which read sensitive information? You can submit the form with XHR, have the server send back a structured response (perhaps as JSON), and deal with it with JavaScript on the client. I admit that it's annoying (you need different form submit targets in development and production), but it shouldn't be a deal-breaker unless you need your entire site to use SSL.
(If you do need your entire site to use SSL, then the appspot domain limitation obviously sucks. If that's the case though, then you're probably doing something with finance, and the datastore's transaction semantics probably cannot work for you at all.)
Compare that, in terms of functionality and revenue generation, to Yahoo! Store (Viaweb), and it seems like Google really has its priorities with App Engine askew.
Obviously, the scope of Viaweb's functionality is much, much narrower than that of GAE, but what is the purpose of GAE from Google's perspective?
Surely, it is not to create bitchfests for upset developers on tech blogs. It doesn't seem like revenue generation, nor developer satisfaction is a priority, either.
That said, it's a beta product.
It always is with Google. When exactly do you expect the "rc"?