Status.net was 'better than Twitter and open' for a while; as I understand it, Status.net was grouping together threads of replies, and handling @mentions in the body of a message (as opposed to only at the beginning) long before Twitter did those things.
Of course, they were kind of obvious additions and Twitter does them too now. Status.net also had a very handy, very slick XMPP interface, perfect for those of us who don't like to play "where's the setting" on a website. Unfortunately that got taken down with the upgrade to Status.net 1.0, and hasn't yet returned.
Technically it's much more than Twitter - it's a way to subscribe to activities in realtime (Activity Streams + Pubsubhubbub), a way to easily do so for users on a website (WebFinger) and a way to notify people of others activities which they are being part of (Salmon).
The activity can be small status messages like Twitter - but can also be anything else, like photos, check-ins, whatever. So in that way it's much more like a distributed Facebook than a distributed Twitter - but right now the existing clients out there don't really show that very clearly.
But that developer community is a given if you are making a competitive or alternative service to something like Twitter. It's a prerequisite, not a bonus. I would argue you're still not giving the users enough of a bone.
How about adding context (e.g. similar to wordpress's category tags). People can then filter the streams they subscribe to.
For example were YouTube to post an OStatus message when a new video were uploaded I could subscribe to GeekAndSundry@youtube.com's messages, then filter that subscription so that only those posts with categories TableTop and TheFlog came through, without seeing posts tagged DarkStarComics.
Equally, if a user posts about their two hobbies, say Technology and Cycling, I could filter to only see their Technology posts, reducing a lot of the clutter in my feed.
Like twitter or facebook but open, decentralized, and unarchivable would be nice. Something along the lines of Off The Record (not google talk's) where users could disavow messages from their account manually or automatically after x number of days. It seems like twitter is useful for asynchronous communication with a very short shelf life, as opposed to IM (synchronous) or RSS (hopefully a longer shelf-life), which would lend itself to that sort of privacy model.
Disclaimer: I have no idea if this can be implemented.