I yawn at your rant.
You are spot-on about the hype problem , PR flack abuses and UI difficulties. The other side of the coin here is a highly engaged community of teachers and learners, large companies making real commitments to develop learning objects and a UI recently gone open source.
You've taken the 20,000-foot perspective and written a broad refutation in general terms.
Can we get some specifics here? Something more like "I saw this at this location.. It said it was accomplishing this educational objective and it didn't because x,y,z." I have to wonder how much actual, hands-on you've done in this environment regarding teaching and learning.
I've never played World of Warcraft, but I do know that some hardcore WoW players bring their tactics and planning meetings in SL using mockups of quests. http://tinyurl.com/ys5mwo It doesn't take a rocket scientist to realize that useful simulation techniques in support of "communities of practice" are transferrable from the world of goblins into the world of professional training and higher ed.
See these videos of teaching objects about aerospace and astronomy content. http://tinyurl.com/y6s4sy I know personally that educators and managers from NASA's JPL are in SL and thoroughly engaged. Can you do this with an IRC channel? As professor John Bransford (edited 'How People Learn') said in his presentation, we are in the stone age with these tools. See: http://tinyurl.com/llys8
As for questioning number of users, I can remember a time very recently when a fledging open source learning management tool was dismissed because its implimentation numbers were miniscule compared with "mainstream" systems like WebCT. It is a good thing that a dedicated corp of developers judged Moodle on its potential instead of its install base.
What I'm suggesting is that the Moodle framework is a good partner to help solve the problems you're pointing out. Second Life by itself is a painful learning tool. But its Web connectivity give LMS tools a good opportunity to extend into immersive spaces for learning. The Web connectivity makes this tool a new breed.