Perhaps the most brilliant thing Flickr did was to provide an API that allows developers to hook into it seamlessly. This meant someone could create a free tool that lets me move photos directly from iPhoto to Flickr. This newfound ease of upload increased my Flickr usage so much that I needed to buy a Pro account. So, get this: Someone else did the work, and Flickr got the money. All because they levy so little control.
Web applications need to relinquish the control, be open and user driven.