Also, I think a lot of folks forget that pdf is just one of the documents they convert. Many of their documents were originally Microsoft Office documents that they've converted to pdf and flash. Again - I'd much rather be able to take a peek at a MS Word doc than have to download it and open it with Microsoft Office on my mac.
For me Scribd makes browsing the web much more seamless. I don't get interrupted by having to download files and open them in another app, then close them, delete the file if I don't want it, then get back to browsing.
Given their user count and traffic, I'm guessing there are many others that feel the same way, but aren't as vocal about their experience because it's so seamless. It's a bit surprising to me to see such vitriol towards an app that provides free hosting to millions of documents converted from all different proprietary formats so they can be easily viewed.