I still don't quite understand their market, and honestly I don't think they do either.
If you're expecting insane traffic to begin with, it makes more sense to create your own systems using a more standard stack and not tie yourself to GAE. If you're just some small to medium sized site that gets "slashdotted or tweeted by demi moore", I guess it is nice that your site will automatically scale to serve the millions of unexpected incoming users, but when you're filing for personal bankruptcy due to the unexpected and infinitely scaling GAE bill that comes along with that, how much consolation is the fact that your server stayed up during the rush going to be?
If you're expecting insane traffic to begin with, it makes more sense to create your own systems using a more standard stack and not tie yourself to GAE. If you're just some small to medium sized site that gets "slashdotted or tweeted by demi moore", I guess it is nice that your site will automatically scale to serve the millions of unexpected incoming users, but when you're filing for personal bankruptcy due to the unexpected and infinitely scaling GAE bill that comes along with that, how much consolation is the fact that your server stayed up during the rush going to be?