Besides having a fairly clean, and at the time pretty useful, product (compared to sloppier MySpace, which it overtook), FB has been the beneficiary of a great deal of free media P.R. – which, in my opinion, has kept it afloat even as it’s become less useful and more obnoxious. Of course, they were probably careful to get their foots in the door with features that made people depend on it (replacing mailing lists for events and stuff).
You see a pretty similar situation with Apple, which has an even less useful product line. Very few professionals in any field outside of maybe graphic design (and that only for legacy reasons) would take Apple products seriously for their work, but the marketing is incredibly good – and for people who want to dick around (as The Onion put it), the products work perfectly well.
Anyway, getting the press to give you free PR often makes all the difference. It explains Apple, reality TV, Sarah Palin, and a lot of other extremely dumb things.