You seem to have confused a few virtues of the iLife suite with sins:
iWeb- "iWeb is serviceable if you're terrified by a href"- I don't want to have to learn that HTML shit- it's hard and a waste of my time. I want to create a webpage showing off my holiday pics, so I don't have to mail 30mb zips to all my family. iWeb is good enough.
iDVD- "iDVD is about as complex as that aforementioned rubber doorstop."- Good. I want to master a DVD and give it a slick menu. Should I learn whatever language DVD menus are written in so I can individually antialias each full stop on the photo gallery captions and movie clips I took on holiday? Nope, iDVD is good enough.
iPhoto-"an increasingly competent photo organizer, but no substitute for true photo-editing software." Awww, shit? It's not as fully featured as photoshop? I can't alpha-blend my layers nor magic lasso a voxel? 'Cos that's what my million holiday pics require, y'know, not just a brief crop, a one-click enhance and a little bit of airbrushing to cover up a spot on that otherwise lovely picture of the missus and me on the beach. iPhoto is good enough.
I think that World+Dog is pretty clear that iLife is an introductory product, with intro level features. Pointing out that iMovie (which lets your average user do things that they'd need serious software, hardware and plenty o'learning to do on a Windows machine) is no Final Cut Pro is akin to pointing out to people that iTunes doesn't balance your chequebook, cure cancer* and eradicate world hunger. Did anyone seriously expect it to? If they did, I'd suggest the problem is with them rather than the product.
A side by side of Picasa and iPhoto, pointing out the relative strengths of (possibly) the most popular free and paid for photo management package may have been a better way forward, IMO.