That's a question that's being asked, answered and discussed on and around Twitter in ever increasing waves lately. This is a pretty good indication about how important Twitter is to the people that are talking about it. It's becoming an increasingly important tool in the everyday lives of those people. I know it has for me. I've stopped using blog aggregation as my way of keeping in touch with what's going on in the topics that I'm interested in. Instead, I follow the people have interesting things to say. Many point to interesting articles, sometimes their own, and if I have the time and inclination, I'll go read those. This has saved me hours a day wading through mounds of closely related headings in Google Reader.
So before talking about what's wrong with Twitter, what is it? It's essentially the conceptual melding of instant messaging, forums and chat rooms. It has that rapid feedback and short messaging of IM but in the context of a larger group of interested people. It has a bit of the feel of IRC and chat rooms but instead of being organized around topics, it's organized around our own unique set of interests. It's "limitation" of 140 characters, defined by what SMS can handle, makes people concise and allows readers to rapidly scan through a stream of concentrated ideas. We overcome the signal to noise problems from other conversation systems by only follow those who we identify as signal and ignore those that look like noise to use. The platform nature of Twitter also allows people to interact with Twitter in as varied a manner as the kinds of people that they follow.
As I've heard Robert Scoble say, "Everyone's Twitter experience is different." That's because you tailor it to create your own experience. So what people will see as wrong with Twitter will depend a lot on how you've tailored it, what tools you are using with it and what additional things that you would like to do with it. Personally I don't think that there is a whole lot wrong with Twitter any more than there is anything wrong with YahooIM, AIM, MS IM, Google Groups, Google Reader, etc. Yes, Twitter could be more reliable and it's a bit surprising that it's not. It's completely down as I write this. The biggest problem is that a lot of people are overlaying what they would like Twitter to be on the service and seeing the shortcomings of that ideal. They see what could be. What's "so close" but not quite possible.
What I do see in Twitter and the way that people have such different ideas about how Twitter should be changed/upgrade/replaced is that Twitter has opened up people's eyes to the many faceted ways that people can communicate in the real-time, always connected, anywhere world that we are just starting to dip our toes into.