Interesting, it definitely makes sense. I've not used the product but I've seen the exported video, Vine has done a good job of removing some of the stigma associated with other services like Twitvid and SocialCam. There's no flash on the viewing page and it feels like a different format to a standard video, like you'd use it to share a moment over a single clip.

An example of a post from Kevin Rose: http://vine.co/v/u7a

The service seemed to be used by much of the Silicon Valley elite (SV Angel Partners, Kevin Rose, MG Siegler) so one could presume many of these people or their firms were investors.

It's a shame to see a company 'acquired' so early on as I like to believe most founders are in it for the long haul but I think this could be similar to when Facebook bought Karma (Gifting) or when Twitter bought Summify (Email newsletters), they aren't only buying them for the talent but to use their technology within their product.