Flickr's main competition isn't with services that have feature parity with them, it's more with the growing list of free image sharing sites. Imgur, twitpic, facebook, picassa web, even dropbox. Flickr's value add is rapidly becoming smaller and smaller, which could very easily undermine their business model.
Exactly. I used to have a flickr account but since dropbox/facebook came along if I want to share anything it goes in dropbox (public) or facebook (public, but it's easy for my family to see the pics).
