The friction of sharing and reacting to life milestones with all your friends and family is an order of magnitude easier on Facebook. For example, try teaching a grandparent or technology inept uncle how to see photos of grandkids/nieces/nephews through email vs checking Facebook...
My kids grandparents are more appreciative of a photo in a frame or a drawing on the fridge than an image on a screen. Of course they can pick and choose if I chose to post those photos on Facebook, but I also take pleasure in curating and actually spending money to create a print (if I spend money on something, I'm more likely to do a good job.)
The definition of "keep in touch" varies for people. If you only use email, you are probably not sharing bulk pictures of family/friends events etc. Why would you use email for that ? I understand that you could get a picasa etc. link in emails but it is easier to use fb. Not to mention the funny comments on pictures.