It's all completely subjective. It's a niche product, absolutely, but a niche is a niche.
Let me pose this scneario. Say me and my wife both have GSIII's. We don't have to be stuck to the idea of 1.5 gigs, lets just say 500 megs, that's still a pretty big file. Too big to email. Lets say I shoot a video of kids opening Christmas presents, say 30 minutes long, and she wants it to show her co-workers or to edit herself. Boom!
The reason I bring that up, is because FaceTime comes to mind. It, too, is proprietary and doesn't seem to offer much functionality to most people. But my wife and I use it all the time. We both have iPhones. Anyone else, I'd probably skype. But, rather than dealing with skype, logging in, waiting, etc., it's just a bit nicer to use FaceTime. So, I 'call' my wife with FaceTime all the time.
It's a niche product, it's not the end of the world, I wouldn't miss FaceTime if it wasn't there. But, it IS nice, and I DO use it, even though other people have owned even iPhone since the 4 (when FaceTime was introduced) and have never used it!
It's a niche product, so what. It doesn't HURT anything to have features like that, and if that happens to be a feature you need, go for it!
Also... I just wanted to quickly mention that I hate the 'Android is for tinkerers' argument. Anyone who can 'tinker' with an Android phone can also Jailbreak an iPhone. Sometimes it takes a few months for a jailbreak to come out for the latest OS and the latest phone, but that's true of rooting Android phones, and some Android headsets are nearly as locked down as Vanilla iOS.
A 'tinkerer' like myself can jailbreak an iPhone and do whatever I want with it, even access the terminal or change things Apple doesn't want me to change (like the lock screen).