It's worth every penny to me. I have upgraded to 200MB, soon to 300MB because of all my photo's online. Using the publishing to .Mac from iPhoto has saved me hours upon hours of time for publishing all my photos, and makes viewing photo's nice and easy. I've also used alot of the free software (Virex, Backup, Photostudio X, Stuff-It) and the royalty free music and sounds for using in video editing is nice to have, saves time instead of searching the net.
Now, if you have nothing but time on your hands, .Mac is probably not worth it. Working and having an baby at home, time is the most valuable thing to me, so spending $100-200/year to give me more free time is worth every penny 4 times over. Nothing on .Mac is "stunning, a technological breakthru" or any such thing, but it is _very_ nicely integerated with the Mac environment and saves time and effort.
Most of the people who argue that it is a waste of money and worthless are the same people who will spend their time building a PC from parts to save $50, who will spend a week getting Gimp to do everything they need instead of spending $60 for Photoshop Elements and having it work in the time it takes to install. That said, there is nothing wrong with those people, and 10 years ago when I was a poor college kid, I was one of them. It all comes down to, how much is your time worth to you.
Brian