No, it is not good at what it does. It is horrible at what it does. It creates a closed-content, open-access network, which is quite possibly the stupidest thing the could have done.
What social networking sites should provide is an open-content closed-access network. By open-content, I mean that you can upload/integrate any digital content you want. By closed-access, I mean you have control over which individuals have access to what. With an open-content closed-access network, you could integrate your email, website, music page, favorite videos, relevant news, etc. without limits, and show it to certain groups. Share the pictures from the party with your close friends, but not your boss. Share your thesis draft with your editing group, but nobody else. Share your WoW info with your guild, not your parents.
Gmail is a much more effective tool that Facebook in terms of keeping you in contact and allowing quick and easy discussion with your friends.
Facebook, Twitter, and Myspace are horrible at what they do. They limit social interaction to mostly the mundane and unimportant. This is why I hate them.
And the worst thing is that because those sites are so big, it is very hard for a new, better site to actually get used. For example, Google Wave had the potential to completely revolutionize social networking and make it into a great open-content closed-access system, but nobody uses it, because they already have a gmail, facebook, and myspace.
In summary, Capitalism can go suck a dick, and stay off the internet, before it completely blockades the stream of wonderful new things being produced.