Even with all its flaws, I think that KDE really does matter. If for no other reason, it is an excellent example of how to run a software development team. Besides that, I personally love the interface, and it has helped peoplemy artist wife loves Linux. None of the problems are insurmountable except perhaps the GPL, but even that might become less important if users move away from central desktop computers and toward more specialized machines (where Linux can really shine).
Most importantly, I believe that the KDE team is on the right path. The developers are focusing the right concerns and have the user squarely in mind. If only we could say as much for most commercial software companies.