The first product launched by a company is sometimes intended mostly a way to gain initial traction and a loyal group of users to learn from, before launching the "real" product(s). That may be the idea here (if it's not, I would agree at least in my case - my mum doesn't want prints of her granddaughter, she wants the files).
My mom wants prints. lots of them. And I'm sure she's not alone. She actually sent me a massive email about what photo prints mean to her and wanted me to post it somewhere. So I did:
The spaces that lead from this user base are pretty crowded though, personal photo sharing/storing wise.
I guess they could go further down the print path and look at high quality mail outs like wedding invites. I'm not expert in the area but I haven't seen anyone really using a fully online service to do those kind of invites.
