Why do event sites suck?

You're missing the bigger picture. Forget about tight calendar integration and blah blah, that's a nice to have, and reasonably easy compared to the bigger problems.

Event sites suck because they never have most of the events you want to go to. And without some fundamentally new way of learning about events, they never will.

Events sites are trying to do something a lot harder than the typical Web 2.0 startup. They are trying to build an accurate and complete picture of the real world, with a constantly shifting time horizon of about a few weeks, out of relatively apathetic users and very flaky and fragmented and non-technologized players (promoters, fans, etc.).

Contrast that with say, a photo hosting site. The assets at a photo hosting site are all-digital, last for years and constantly accrue new visitors. If you uploaded a photo to Flickr in 2005, it's still making money for them today, one way or another. It's also still garnering the user comments and page views, giving them some love at the same time. You have no expectation that Flickr should have all the photos you want to know about, just that there be enough good ones.

Your idea of autodiscovery via microformat already exists (hCalendar) but good luck getting others to use it. There are several startups which tried natural language parsing to grok events from the web but none came close to succeeding. The best method might be to reuse calendar entries, and Google's made some efforts in this direction.

Anyway, all the above problems seem to confine event startups to, at best, becoming authoritative for certain local scenes. None have ever taken off and just become authoritative even for an entire city, or a music category across cities. The only ones who are winning are just pouring money into the problem, sucking up event data from a variety of commercial sources. So far there's no real community solution to this problem.

I am not convinced that very many people care about discovering new events in the first place, at least not events that don't have an immediate impact on one's social status. People learn about most events from their friends or their existing communities. This should not seem strange because people become friends with one another (or join communities) through having aligned interests. This solution seems optimized already. I don't think you can beat it, or at least not in a way that creates enough value to justify a standalone "event community". Does it hit home that you, OP, may be essentially trying to create a community around people with the common interest of "We like to attend events"?

Ah, but you say: "Well, the key value will be that people will link to their friends and they will interact around the events that they will attend together. We're covered." Indeed, this is usually listed in the first set of bulleted features people start whiteboarding:

  Idea #27: Let's Build an Event Site!
   * Aggregate all events from everywhere... except recurring Sunday church services, random unknown people's birthday (who published their private event as public), and dozens of guys who are making up interesting-sounding events just trying to do lead generation for their Quixtar, TEAM, etc get-rich-using-something-similar-to-a-pyramid-scheme-but-we-swear-its-not-a-pyramid-scheme group.
   * Let people pick what events they are interested in and add them to their 'list'.
   * Let people invite their friends to use this service too and they can link up their profiles as "friends" in the system. (awesome, we're viral!)

At this point in the bullet-list, OP, someone needs to state the obvious (either you or your co-founder) and suddenly say, "Well, can't they just use email to invite friends to events?" ... then the both of you can avoid going down this path and focus on problems that people actually have and are willing to pay you to solve.

Ah, and I just have to mention that no one really cares that much about calendars either. It is exceptionally rare that people use them outside of work. And really, if you are employed at a major corp, you can't very likely import your schedule for your wild week at Sturgis into your work calendar. Some people frown on knowing the tacky aspects of your life outside of work.