People want to know when certain websites they care about have new stuff. The fact that RSS can be used to achieve that is, and should have been treated as, completely irrelevant. Nobody except geeks like me care if they're transmitted through RSS, PubSubBubHub or carrier pigeons.
Likewise, I don' think most people care that the website has a "feed" and they need to get a "feeds reader" to be informed.
I think Firefox had the greatest opportunity to make it happen and they blew it. RSS should have been integrated with the bookmarks system, and I don't mean those awful "dynamic bookmarks" or whatever they were called.
When some page was bookmarked, the browser should save its RSS feed URL alongside (hidden!) and use it to alert people to updates to their sites, and provide an one-click way to open the new post(s) in a new tab (and an easy way to disable notifications from that site, certainly).
This would've made RSS useful for much more people and provide a great incentive for websites to provide good feeds. Unfortunately, it remained a geek tool, and so it'll die as such.
Steve Jobs would never have promoted RSS. He would, though, create user experiences based on it. Which really jars my reality to even say it, but your comments/observations and my own experiences (I use RSS exclusively on my phone as an offline info gatherer mostly used when I'm on subways out of Internet range) that 1) RSS is really cool and 2) there are no compelling end-user RSS-based tools.
Hackers probably miss this because they feel the implementation details are a core part of the experience. A system with no implementation details readily available in some form will have a hard time gaining support from the type of nerdy dudes who like to change the world from their garage without significant secondary draws.
The current industry-wide focus on simplified UI and managed UX that has the effect of constraining users into presumptive usage patterns is quite obnoxious to hackers and power-users who want to be in control of their own experience.
I do feel that implementation details matter. But they need not be forefront in the experience itself. And confusing the technology with the experience is a classic blunder (cue: land war in Asia).