It would be mediocre if it was simply an "open api" twitter/facebook but, given the chatter on the Alpha site and the look of the API on git (https://github.com/appdotnet/api-spec), I think there is something bigger going on here.
Any developer would be a fool now to build a product whose core relies on Twitter's API. And yet the core functionality of Twitter is an incredibly useful base to build on.
With App.net you don't have the volume of Twitter, but on the other hand you will presumably have a much higher signal to noise ratio. It won't be inundated with marketing spam, bot follows, and banal teen banter. And in any case, Twitter was small once too, and people found a use for it. I think a critical mass of 10,000 is definitely enough to enable some interesting apps.