I've also worked on several large dating and SN projects as part of a team. I was hired on as the primary consultant and designer. The first project was a dating site over 3 years ago, which was a real learning experience. Mostly I learned what doesn't work and things not to do.
Their goal was to try and out gun the other major players with fancy features. This turned out be their first major mistake which I advised against but fell on deaf ears, but they were the ones paying the bills so I went along with it for the most part. They searched out and added just about every modern and robust feature that was available, including fancy interactive flash based photo galleries. Now features are an important factor and can contribute to a site's success, but they aren't worth anything if the user becomes overwhelmed and you have features that land up being too confusing or hard to figure out how to use.
The site had so many features that even navigating the site was a tedious affair.
This what landed up happening ... they promoted the site and had several thousand members pretty much right out of the gate soon after launching the site. However, they started getting feedback from members that pretty much all said the same thing, they loved the look of the site but said they didn't understand it and it was too confusing and had trouble figuring out how to use many of the features, which ultimately landed up causing the site to die off.
The lesson learned was, it's important to choose your features wisely, don't just add frivolous features just because your competitors have them and you want bigger and more robust features than they do just to try and "WOW" members to your site. It's important to know the demographics and target audience of your niche. If you're targeting kids and teens, then the "WOW" factor can work for you as they tend to love frivolous toys and typically learn how to use technologies fairly quick. However, if your target audience is older, especially over 40, they aren't as eager to learn new complex things as kids are, yes they like features too, but only if they are easy to use and are beneficial and provide real value to their experience of using the site.
I now try to take a different approach when developing a site than I used to, when I see a robust feature on another site, I don't immediately have the mind-set as to how can I replicate it or make it bigger, better and more robust, instead I now try to figure out how I can improve it so it's less complex and more user friendly to use, even if it means making it less robust.
Probably the most common statement I hear from webmasters is ... "my competitors have this or that feature and I must have them as well, plus more and bigger better ones in order to compete with them". For the most part this just isn't true, bigger doesn't always mean better. One thing I learned and never forgot when I was first learning how to become a webmaster (many many moons ago ...

) was the K.I.S.S. factor "Keep It Simple Stupid". Which isn't always easy to adhere to with constant new technologies always emerging and tempting us. However, the K.I.S.S. factor still needs to be considered and applied. What really sells a site is "user friendliness", often simplicity and ease of use will win over a site that's bloated with complex robust features. Off hand I can think of several examples of sites I know of that are very successful. One is FarmersOnly, which exemplifies simplicity, it's a very cookie cutter dating site that resembles many of the out of the box dating scripts available, it only has your very basic features, no blogs, forums, fancy galleries or search capabilities, not even a fraction of the features Etano has, even the site's layout and design is poor, and I also discovered bugs when on the site. However, since it doesn't have very many features the site is real easy to navigate and use, which seems to appeal to many of their members. Although, it's only fair to mention that FarmersOnly was started by someone who also owns a marketing firm which gives them a major advantage, but even still, if people were just interested in robust features they wouldn't have joined in the first place.
A quality top-end dating or SN site with lots of features is going to be very robust that includes many different sections and features and therefore navigation and user friendliness are key elements which need to be addressed and are often overlooked. Don't assume that your members and users are all as Internet and computer savoy as you are, most PC users are novices and casual users. This can be a daunting and time consuming task even for an experienced designer and developer, but this should be your main focus and where you should invest most of your time as a webmaster. It's more than just making your site look pretty, it has to flow and be easy to follow and find your way around. Also try and bring your site's key features to the forefront and make them easily accessible with minimal effort and clicking by the user. Besides creating and providing a good FAQ section, even strategically place help buttons in key sections of your site that pops up a window that offers explanations, tips or instructions for that particular section or feature. This can be a very time consuming endeavor writing and creating all the required little popup tutorials, but in the long run it can pay off in spades. It's the only way to hold the user's hand and walk them through the process of using a robust site.
Once you've got a great looking and user friendly site, now comes the real challenge, getting visitors and members. The web in recent years has become saturated with sites, especially with dating and SN sites, making it near impossible to get noticed and found these days unless you have real deep pockets for ad campaigns. You can still eventually build traffic and members on a small restricted budget by doing a lot of manual work, but it can take years of patience, perseverance and hard work before your site starts to achieve a level of success where you're actually making good money.
You can't directly compete with the big catch-alls like Facebook and match.com, they just simply have too much money behind them. However, a good niche can do very well and are becoming increasingly popular and in demand. Facebook and MySpace will always attract the kiddies, but adults that really want to meet quality people who share common interests are starting to look elsewhere for alternatives, they're becoming tired of the increase in shenanigans and nonsense that's on the big free-for-all sites.
It was recently in the news that MySpace has fallen off drastically over the last year and are unlikely to ever regain it's popularity. MySpace is still the number one site for musicians to promote themselves, which is what it was originally started for, a Fan Fare site. The problem is, it's become nothing more than a self promotion site full of musicians, people and companies promoting their products and services, it's no longer an ideal place to meet people. Once a site gets a reputation it tends to stick and it's hard to shake it.
The bottom line, and good news is ... yes it's still very possible to create a successful niche based dating and/or SN site if you have a plan and a good niche and willing to invest the blood, sweat and tears in creating a quality site and marketing it. Again, unless you have a real deep pockets or you're one of the rare lucky sites that becomes an overnight success, it could take years before your site starts to take off and becomes successful.