1. When media hype provides you with $200k, you're still best served by bringing people's expectations down to earth. There was no way they were going to be able to build anything approaching a Facebook killer in 3 months, and it would have been best if they would have made that clear in the beginning.
2. There are a number of projects like Diaspora that have been working for years towards the same exact goal. The only way Diaspora could have succeeded where those have failed (or not-yet-succeeded), is if they had properly articulated where they would go right where others had gone wrong. If you can't do that, you probably don't have the perspective necessary to take on such a huge project.
3. We all need to be less susceptible to the story of the "boy wonders" taking on the establishment. Between Diaspora and Haystack+, these should be sobering lessons about the dangers of hype and a good human-interest story when the result we need is stable, well-written code.
+ http://blog.jgc.org/2010/09/myth-of-boy-wizard.html
4. Open source isn't magic. Rails isn't magic. Having a good idea and a whole lot of heart isn't magic. It's true that the software world isn't exactly a meritocracy, but at the same time, we need to recognize that you have to be able to build something generally usable, and if you can't, there's nothing that will save you except for harder work and learned lessons. Some bugs will be fixed by the interest in Diaspora, but there are big architecture questions here that need to be resolved, and coordinating that democratically through the internet in a sea of strangers is a logistical nightmare. And while rails does provide a lot of functionality out-of-the-box, a project of this size isn't held up by how long it takes to write the photo-uploading code, it's held up by the big-picture stuff that rails can't really help you with. In the end, programming is programming. You need specs, mockups, user stories, documentation, all kinds of unsexy stuff.
I think we'll probably see Diaspora stabilize into something usable at some point. But I'm very doubtful that will be anytime soon, and I'm especially doubtful that it will be before the other projects (Elgg, Appleseed, OneSocialWeb, StatusNet, etc) mature into the facebook killer people want to see.
Building the kind of open source social networking software necessary to take on Facebook at it's own game is such a massive, complex undertaking, and it's such undiscovered territory, that there really is a big disadvantage to being the new kid on the block.