Picasa Web Albums is one of the Google services that has been unfairly neglected by Google, even if it has a lot of flaws and many missing features. Probably the biggest flaw was the goal of the service: to be an online extension of Picasa, a popular photo management software. Picasa Web Albums inherited Picasa's limitations and didn't add many useful features because they were available in Picasa. Instead of focusing on improving the web app, Google developed Picasa for Mac, added new features to Picasa and acquired Picnik, an online image editor.
Picasa Web Albums is somewhat similar to Microsoft's Office Live, an online extension of a popular software, which is surprising, considering that Google is a big proponent of cloud computing.
If you try to upload photos to Picasa Web Albums, you'll notice that Google recommends to install Picasa. That's because you can only upload up to 5 photos at a time using the web app (unless you're using Internet Explorer: Google developed an ActiveX control for uploading photos).
Try to download an album and you won't be able to do that without installing Picasa or using some workarounds.
To edit a photo, you need to use Picasa or Picnik, a slow Flash image editor. It would be much more useful to have some basic editing options inside Picasa Web Albums, so you can quickly retouch your photos.
Andrew Maxwell and François Beaufort created a long wish list for Picasa Web Albums (sorting albums by name, sub-albums, upload by drag and drop, multiple sign-in, offline mode) and many of their issues can be easily addressed by storing photos in Google Docs and transforming Picasa Web Albums into a Google Docs app. This way, you'll use a single file storage service, uploading and downloading multiple photos will be much easier, photos could be shared privately without revealing all the photos from an album, you could add photos to multiple folders and even create subfolders. Another benefit is that you'll be able to use a syncing software for all your files if Google decides to release a software like Dropbox or Windows Live Mesh.
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