Before the rise of Twitter's own official client, it really was an elegant way to handle the problem of having a minimal interface (i.e. no reply button). But yes, it was basically something you wouldn't "get" unless someone told you, or you used twitter enough to eventually notice that someone's direct-tweet did not make it into your overall timeline.
And the many screwups with direct-messages is pretty well known...
I'm not certain that's fair. They grew by an order of magnitude every half year or so. That's very difficult to keep up with, especially when you have no idea how to turn all those signups into money.
I followed the entire thing and was trying to use the site, too... my impression is that there was an equal mixture of legitimate challenge met well, and incompetence/bad decisions.
And the many screwups with direct-messages is pretty well known...
If that riles you up, look at how SMS legacy commands still cause issues: http://www.buzzfeed.com/jwherrman/one-thing-you-definitely-c...