A. MySpace came before Facebook and at that time, it WAS successful.
B. Google can't afford to let this go the way of Google Wave (not that it was intended to be a social networking thing anyway). They are investing HUGELY on this.
C. Does circles really not excite you at all? It's easily the #1 reason to switch from Facebook. I almost never share **** on Facebook, because I don't want EVERYONE to see it. Why share some tech story when some of my friends couldn't care less? Why send a message to everyone about how life sucks and is depressing when only your closest friends will actually respond meaningfully? It's stuff like that which Facebook simply does not have a response for.
In short, this isn't Yet Another Social Network, it's Google's big play to kill Facebook. If you read Ars's article on it, you'd know how seriously they're taking this. Google is scared of Facebook, and that's never really happened to Google before. Google is out for blood on this one, and no matter who wins, I think it will be very easy to say, looking back, that it definitely did not go the way of Google Wave.