I believe they're simply optimizing the wrong variables. It has certainly driven me away. I use the google personal block list, and Quora was among the first sites to go on it.
1. Third party statistics sites like Alexa and Compete are horribly untrustworthy indicators of reality.
2. Growing traffic isn't the best way to foster a community. I believe pg has written about this a few times, with regards to communities in general and HN.
I think the Quora community is amazing. It's very populous and the quality of answers is generally on par or better than specialty interest sites/forums from a wide range of topics, all in one place. Of course, it has its strengths and its weaknesses - for example, a strength would definitely be reading an answer from an actual CIA [something] analyst, former Foreign Service Officer, doctor, etc. on a relevant question, but it falls behind in areas like technology IMO.
The site is annoying and I hate a lot about the community (surprise, it turns out "mature adults" can use shitty memes just as much as the teens everyone blames for them on reddit), but I think they've done a great job at fostering the kind of community they want so far. If anything, it's being threatened by the pressure of growing.
They're always wrong. But, from what I can tell, they're usually wrong in ways that are still usefully predictive. If you compare two sites at Alexa.com, and there is a vast difference in popularity (as is the case between Quora and StackOverflow), you can probably assume StackOverflow is bigger and growing faster...even if you can't be sure how big the difference is. I wouldn't want to make business decisions on it, but it's good enough for me to feel comfortable making snarky comments about Quora.
"2. Growing traffic isn't the best way to foster a community. I believe pg has written about this a few times, with regards to communities in general and HN."
But, it is the way to justify $61 million of investment. HN doesn't have to ring the cash register. Quora does, at some point.
Anyway, I find Quora annoying. The community may be awesome, but I don't believe the curators of that community are deserving of my attention or my contribution to their walled garden.
That said, as tools for relative comparisons they're quite useful, as long as you put a sufficiently large gray area around the results (50% or so). That way you can compare sites in magnitude without getting bogged down over whether a site at rank 1200 is larger than a site at rank 1201, the difference is small enough to be meaningless.
The final way in which you can use them is to use their time series to determine a trend. And that's where both are very useful, because assuming their sampling method is the same over time and assuming that there is some significant relationship between all the traffic you're interested in and the portion sampled the trend will be quite strongly reflective of what is actually happening. So growth, stagnation and decline can be determined with some accuracy (you still have to do some smoothing out but on 'max' with Alexa and a site that's a couple of years old the trend will be clearly visible).
Alexa and Compete are bad sources.
Other third party sources like Quantcast, comScore, Nielsen, etc, do a better job of measurement, especially if they've been beaconed. You will never get complete agreement because of variations in implementation. A site's own "internal" analytics, like Google Analytics or Omniture, will never quite agree either.
Third party data is still ordinally and directionally correct most of the time. Google Trends and Quantcast both show a general trend upward, but it's not hypergrowth. What isn't mesaured here is engagement, and that's a much more interesting metric for Quora.