Dave the Mobile Warrior posed this question to me regarding FaceTime: Do you think it's a flop?
It's a good blog topic :)
Right now, I think so...it's supposed to be open-sourced too right? No one has seen it so far outside of Apple. Like you said, few folks from Apple even talked about it anymore. Apple is known for taking the long view on stuff like this. Look at how long it has taken Quicktime to get to where it is today.
But Facetime just has too many missing pieces. It cannot do anything else other than video chat with other iOS devices unless it has a camera and with Macs installed with the beta Facetime app.
I think it put the fear of God into a lot of folks when Steve Jobs demoed it but since then, life has moved on for Skype, Fring, and everyone else. Even Google has their own video chat coming for Honeycomb (Android 3.0).
Also, keep in mind that there is still no Facetime chat via 3G yet. And yes, you can conduct video calls over 3G with Skype.
So yeah, it's a big flop so far.