meh.
A. the current online service, no matter how degenerate is better than NO online service.
B. It's free, it should be free. Don't encourage nintendo to make us pay. Xbox lives fees are cheap, but still unecessary.
C. If all people playing have good connections, lag is manageable. If one of more people do not, lag is bad. This is the case for any p2p based online game. They could have done the method where the lag is based on the host, but that would lead to host advantage which would break the entire online experience. Consider the sheer number of people playing on Nintendo's servers at any given time. And clearly Nintendo has less server capabilities than X-box. Also, X-box has been dealing with online for like a decade, and the 360 itself has had online games for like two years longer than the Wii. The wii still has loose ends to tie up obviously. Also consider that there is no fighting game as big (fame wise, and content wise) as smash that has online capabilities.
D. Agreed about "With Anyone", its worthless. use SWF Friend Finder or any of the several friend finders on the internet., its a perfectly fine replacement for "With Anyone".
E. I've never had more than 64 friends all of whom I consistently communicated with on any online service of any kind.
F. Agreed about communication. However, if you use a friend finder, you can communicate with your friends using other methods.
In summation, every problem unique to brawl online is pretty easily circumvented, and for the first effort at online in a smash game, I find it to be decent and better than nothing.