One, some apps do a terrible job with long urls. Ever get an email with an url that’s been cut up across multiple lines and you have to perform minor surgery on it before you can open it? Yes, there’s a bug somewhere in the message chain, but that’s reality.

Two, analytics. Ever want to know how many people click thru the link you sent in email, post twitter or facebook, …? An URL shortener can tell you (bit.ly and other do). Not a terrible way to measure your influence and raise your ad rates.

Three, central point of failure is concern, but (a) that’s easy to overcome by publishing your mapping so others can mirror it, and (b) URL shorteners can actually reduce failure by archiving the page they point to. That helps with link rot.

Four, you other concerns you mention are valid, though I could just as easily argue that URL shorteners can help with those things. Imagine an URL shortener that verifies the target url to make sure that there is no SPAM, malware, etc. Similarly, imagine an URL shortener that verifies the target url for inappropriate content (whatever that may be) that increases trust instead of diminishing it.

Any how, I can imagine all sorts of other interesting services that you could integrate into an URL shortener. I love that folks are experimenting. Let a thousand flowers bloom. Let’s see how much value we can squeeze out of this. If there’s enough aggregate value, I’m sure there will be a bunch of consolidation, and then a Google or Microsoft will notice and buy one.